Net profit before tax of $325 million achieved on record TTV of $20.1 billion.
Flight Centre has just released its full year results for the twelve months to 30 June, with the figures impacted by currency fluctuations, political uncertainty and “significant airfare deflation in key markets”. While TTV increased 4.2% to $20.1 billion and revenue was up 1.3% to $2.67 billion, re-tax profit dipped 5.7% to $325 million, including a $4.1 million loss incurred on the exit from the Employment Office business.
“In a challenging trading cycle, characterised by record low airfares, we achieved our major sales targets of topping $20 billion in TTV for the first time and growing online leisure TTV beyond $1 billion,” said ceo Graham Turner. He said the first half of the financial year had been particularly tough, with growth and profits accelerating in the last six months.
Record air volumes and room nights were achieved in both Australia and New Zealand, but leisure profits in Australia decreased slightly due to international airfare deflation. Tour operators Top Deck and Back-Roads Tours together lost $1 million during the year – in contrast to a $9 million profit contribution during FY16.
The company announced a 94c final dividend, boosting the full year payout to $1.39 per share fully franked which will return a total of $140.4 million for shareholders.
Flight Centre also unveiled details of a business transformation program which was introduced earlier this year to “fast-track revenue growth, deliver new efficiencies and contain costs globally”.
The goals of the program include achieving 7% annual average TTV growth over the next three years, stronger returns from the existing FLT network through “scalable and profitable growth, tight cost control and the removal of all current loss-making businesses,” and a return to a 2% net margin as a percentage of TTV within three to five years.
Turner said it was too early to provide profit guidance for the current year, but said “we believe we are well placed to improve, given the investments we have made, the strategies that have been implemented and the benefits that we have started to see from the transformation program”.
More details in today’s issue of Travel Daily.