Flight Centre has notched up another record profit result and forecast a boost of up to 12 per cent in pre-tax earnings for the new financial year as Australians’ love affair with travel shows no sign of abating.
Australia’s largest travel agency posted a 23 per cent rise in net profit to $246 million for the year to June. Revenue rose 8.7 per cent to $1.985 billion as sales increased in both leisure and corporate travel.
The travel company’s pre-tax profit of $349 million was better than what it had forecast at the start of July.
Flight Centre will pay a final dividend of 91 cents on October 18, up 28 per cent from 71 cents in the same period a year earlier. It takes the payout for 2012-13 to $1.37.
Shares soared 8.5 per cent to a record closing high of $48.41.
Flight Centre managing director Graham Turner said its Australian business was again the main driver of its full-year profit but the international operations contributed a total of about $57 million to pre-tax earnings.
‘‘This is a 20 per cent year-on-year increase and a promising sign for the future,’’ he said. ‘‘Importantly, we have scale and solid platforms for growth overseas, particularly in the UK and USA.’’
The company’s pre-tax earnings from its UK business have doubled over the last two years to $32 million despite ‘‘economic uncertainty domestically and in Europe’’.
Mr Turner said the leisure travel business in Australia performed strongly – especially in the second half – to more than offset slightly softer corporate travel results.
Flight Centre’s corporate travel business here failed to meet expectations, although it did record pre-tax earnings and turnover in excess of $2 billion for the year.
The travel company is targeting pre-tax earnings of between $370 million and $385 million for the new financial year, which will represent growth of 8 to 12 per cent.
‘‘Achieving 8 to 12 per cent underlying profits before tax will not be a formality for a company of our size and given the challenges that can arise, but we are well placed to weather any storms,’’ Mr Turner said.
Mr Turner said trading results in July and August indicated that Flight Centre was ahead of its performance during the same period last year.
He also reiterated that the company does not expect large fluctuations in the value of the Australian dollar to affect its business or to radically change Australians’ travel habits.
Flight Centre also said its intention was to create longer term shareholder value by increasing dividend yields rather than one-off distributions.