Flight Centre announces full year result
A stronger second half performance has helped Flight Centre Limited record a $120.0million pre tax profit for 2005/06, a 4% improvement on 2004/05.
After being 4% down (at $49.8million) at December 31, the company’s pre tax profit for the six months to June 30 was $70.2million, 10% higher than the second half of 2004/05.
After tax, profit for the full year was $79.9million, a 4% increase.
Sales continued to grow, with total transaction value increasing 13% to $7.8billion and revenue increasing 11.6% to $1billion. This slower revenue growth reflects airlines’ increased application of zero margin surcharges.
Earnings per share increased 4% to 84.6cents.
The company’s directors have declared a fully franked final dividend of 32cents per share, payable on October 13 to shareholders registered on September 22. This follows an interim dividend of 20cents per share.
In announcing the results, Flight Centre Limited managing director Graham Turner said the company was pleased to have improved on 2004/05, particularly after its poor first and second quarters.
“Within this environment, our cost reduction and business improvement strategies have started to deliver some benefits, as reflected by our stronger second half,” he said.
“Our gains have, however, been offset by the impact of increasing airline fuel surcharges on revenue and profit.
“Some airlines, including Jetstar and Emirates, are now ‘fuel inclusive’, but others treat fuel as somehow separate to the cost of the airfare. By doing this, these airlines create a confusing situation for customers and expect travel retailers to collect hundreds of millions of dollars of their legitimate operating costs without earning margin.
“While Qantas is by no means the only airline that persists with this confusing practice, we welcome recent reports that its leadership will review its surcharge policy.”
“While Australian leisure remains our largest profit generator, its results were disappointing and its performance overshadowed by other businesses in 2005/06,” he said.
“Our retail shop distribution network will remain an important contributor to both our brand and our profit, but our growing diversity – of both brand and geography – is clearly one of our future strengths.
“We are now more than just an Australian-based leisure travel specialist, as evidenced by our corporate travel growth overseas.
“In just two years, we have expanded FCm’s network to more than 50 countries (nine owned, 41 licensees) and secured both equity and strong local partnerships in the world’s emerging new business economy known as BRIC – Brazil, Russia, India and China.
“Given its strong growth, we anticipate FCm Travel Solutions will account for at least half of the company’s overall profit within five years.
“Pleasingly, we also recorded strong profit growth in South Africa and significant improvement, culminating in a second half profit, in Canada’s leisure operation, which had struggled since September 11.”
Graham Muldoon
Vegas’s Billion-Dollar Secrets – What They Don’t Want Tourists to Know
Visit Florida’s New CEO Bryan Griffin Shares His Vision for State Tourism with Graham
Chicago’s Tourism Renaissance: Graham Interviews Kristin Reynolds of Choose Chicago
Graham Talks with Cassandra McCauley of MMGY NextFactor About the Latest Industry Research
Destination International’s Andreas Weissenborn: Research, Advocacy, and Destination Impact
Graham and Don Welsh Discuss the Success of Destinations International’s Annual Conference
Graham and CEO Andre Kiwitz on Ventura Travel’s UK Move and Recruitment for the Role
Brett Laiken and Graham Discuss Florida’s Tourism Momentum and Global Appeal
Graham and Elliot Ferguson on Positioning DC as a Cultural and Inclusive Global Destination
Graham Talks to Fraser Last About His England-to-Ireland Trek for Mental Health Awareness
Kathy Nelson Tells Graham About the Honour of Hosting the World Cup and Kansas City’s Future
Graham McKenzie on Sir Richie Richardson’s Dual Passion for Golf and His Homeland, Antigua
ADS PRO 
Qatar Airways offers flexible payment options for European travellers
Airlines suspend Madagascar services following unrest and army revolt
Digital Travel Reporter of the Mirror totally seduced by HotelPlanner AI Travel Agent
Strike action set to cause travel chaos at Brussels airports
Phocuswright reveals the world's largest travel markets in volume in 2025