Flight Centre forecasting underlying pre-tax result of $90m-$110m, down as much as 35%.
Flight Centre Managing Director, Graham Turner, has just confirmed slow trading conditions, telling shareholders at the company’s Annual General Meeting that the pre-tax profit for the six months to 31 December could be as low as $90 million – compared to last year’s $139 million result for the same period.
Poor trading results in the Global Touring business are being compounded by issues in Flight Centre’s Australian leisure operations, including the impact of as much as $7 million to reaccommodate customers who would have othersiwe lost their money as a result of the collapse of Tempo Holidays and Bentours.
Flight Centre has been hit by $4 million in higher wage costs flowing from its new Enterprise Bargaining Agreement, and additional consultancy costs. TTV in the Australian business was up 5.7% in the first quarter of the year, bolstered by “solid results” from emerging businesses including Ignite Travel Group, Travel Partners and online. However turnover in the Flight Centre shop network had impacted back-end revenue and margins, he said.
Turner highlighted Flight Centre analysis of Australian outbound travel data, which showed growth slowing to less than 1% across July and August of this year – in contrast with a 7% compound annual growth rate over the last decade.
More details in today’s issue of Travel Daily.