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Flight Centre turns the corner
Flight Centre shares rose 20% yesterday as Founder and executive chairman Graham Turner said December quarter pre-tax earnings were expected to broadly match the previous corresponding period after adjusting for international financial reporting standards (IFRS).
Cost cutting and improved corporate travel performance were seen as the cornerstones of the resurgence.
Mr Turner said the unaudited results signalled Flight Centre had “turned the corner” after a “disappointing” first quarter that had exposed a “somewhat bloated and bureaucratic” structure as margins shrank.
“The second quarter achievements are pleasing and show that the steps we have taken to reduce costs and to build a stronger overall business are beginning to generate results,” he said.
Asked about the jump in the share price, Mr Turner said “We’ve been trying to ignore it for the past couple of years. But in the end it’s our results that will drive the share price and if we get the results the share price will move in the right direction.”
Mr Turner declined to comment on whether there had been any revenue growth.
But he said: “If we didn’t feel there were good growth prospects for our company, we wouldn’t be here and we will expand a bit more, particularly in the corporate area.”
“We are starting to see the benefits from our investment in creating the FCm Travel Solutions network,” Mr Turner said.
“With last year’s acquisition of India’s Friends Globe Travels – a business that is already delivering strong profit growth – and our investment in the joint venture in China, there are exciting opportunities for Flight Centre Limited and for FCm Travel Solutions in the world’s two growth economies.”
Graham Muldoon
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