Flight Centre seeks bigger share of corporate market
FLIGHT CENTRE has set profit and sales records for the first half of the 2013 reporting year, as it looks to increase its focus on corporate and premium customers and further integrate its online and in-store businesses.
The travel company reported a net profit of $91.8 million for the six months to December, a 13 per cent increase from the previous corresponding period, despite consumer and business confidence headwinds.
It declared a fully franked interim dividend of 46¢ per share. The shares fell 79¢ to $31.50.
The company said its growth outlook for the financial year was marginally ahead of targets, and it would continue to aim for profit before tax of $305 million to $315 million, with its best months ahead.
"Australia and the UK are now entrenched as the company's largest and second largest profit generators and again delivered record [earnings before interest, taxes, depreciation, and amortisation] in challenging trading conditions," the managing director of Flight Centre, Graham Turner, said.
The company's online portal reported a 23 per cent first-half growth in sales and was on track to reach $5 million EBIT this year.
Flight Centre said it would focus on growing its corporate and premium flights sector and fully implementing its "blended model", allowing customers to seamlessly move between shopping online and in-store.
"The overall move from economy to business, particularly in leisure, is going to be a positive move for us and the travel industry, as well as airlines generally," Mr Turner said in an investor briefing on Tuesday.
A Shaw Stockbroking analyst, Darren Vincent, said the results were in line with expectations, with the share price dip on Tuesday was a reflection of the market's nervousness about the Italian elections, and a slight inherent volatility in the stock.
"We're staying bullish," Mr Vincent said, adding the outlook for the company was expected to remain stable, with consumer sentiment unlikely to weaken further and little challenge from online travel packages.