Chief executive Graham Turner said he was confident in Flight Centre’s long-term strategy.Credit:Oscar Colman
Flight Centre’s shares slumped as much as 8 per cent in morning trade,their worst intra-day performance in more than a year,but rallied by the afternoon to recoup half of those losses and closed 4 per cent lower at $20.89.
Turner said he was surprised by the market’s reaction,given the company had flagged it would meet its earnings targets for the year.
Underlying profit before tax was up 565 per cent at $106.2 million in the December half,and the travel agent has predicted an underlying profit before tax of between $300 million and $340 million for the 12 months through June,up from a $270 million and $310 million forecast earlier this year. It is targeting a 2 per cent profit margin across its corporate and leisure arms by 2025.
“You have to consider this result came out of two years of COVID-19,” he said. “Last year,we made a modest $110 million profit with a 0.5 per cent margin. We’ve upped that to 0.9 per cent for the first six months of the year and made a decent profit. We expect to be well over 1 per cent for the second half of the year and be well positioned to meet our FY25 profit margin target of 2 per cent from there,” Turner said.
‘At a time when discretionary budgets are typically tightening,travel remains an outlier and a priority spend for many.’
Flight Centre CEO Graham ‘Skroo’ Turner
Turner said the swing back to profit highlights the resilience of the travel industry amid the cost-of-living crisis as it emerged from the pandemic years.