2001

Flight Centre's established offshore operations soar to new high

Australia's leading travel retailer, Flight Centre Limited, has announced plans for a special dividend payment and substantial share issue to shareholders. Record performances by Flight Centre Limited's established off-shore operations have helped the company post a reasonable profit in the first half of the 2000-2001 fiscal year. Australia's fourth largest retailer today announced a $27.83 million operating profit before tax for the six months to December 31 a 15.9% increase on the corresponding half year's result with the after tax profit being $17.4 million. Flight Centre Limited chairman Norm Fussell said, while Australia's performance was disappointing, the result had been boosted by record performances in the United Kingdom, New Zealand, South Africa and Canada. "In each of these countries, the first-half performances have surpassed the previous records," Mr Fussell said. "New Zealand recorded a 35% profit increase in local currency on the corresponding period, Canada 21% and South Africa 55%. "The United Kingdom was consistently profitable and should have a record full year result. "Flight Centre Limited's presence has also increased substantially off-shore, with the company opening 15 new businesses in New Zealand, 18 in South Africa, nine in East Canada, four in West Canada and four in the UK during the six months. The UK is now on track to grow from 30 to 48 stores this financial year. "These results provide further evidence of the company's success in exporting the retail recipe that has underpinned its growth in Australia." Mr Fussell said the New Zealand and East Canada operations, in particular, continued to perform strongly, with the latter recording a 39% profit increase. Flight Centre Limited chief executive officer Graham Turner said the company expected continued improvement from its overseas enterprises, including its United States operation which celebrated its first birthday during the year and now has 14 businesses. Mr Turner said US losses were greater than expected in the first half, but early indications suggested the second half result would be in line with budget expectations and growth would continue. He said the company had also maintained its impressive growth record in Australia and had opened 73 new businesses during the six months. "The new additions include 24 Flight Centre, eight Corporate Traveller, two Great Holiday Escape and two Student Flights stores," Mr Turner said. "In line with this expansion, turnover in Australia increased by 23% to $954 million." Mr Turner said the new Australian businesses included a number of teams working at the company's on-line division, flightcentre.com. He said flightcentre.com was, as expected, incurring losses during its start-up phase, but should trade profitably on a month to month basis before the end of the financial year. He also repeated earlier comments that the company had recorded "mixed" results in Australia, during what seemed to be a difficult climate in the first half of the year. Mr Fussell said total sales revenue had increased by 32% to $1.374 billion and the board had declared a fully franked interim dividend of 11 cents-a-share, up from 10 cents for the corresponding period last year. He said the after-tax result, a 10.5% profit increase, was lower than expected because the company had not yet claimed the future tax benefits associated with its US losses. Flight Centre Limited is Australasia's largest travel retailer and boasts more than 700 stores and businesses in Australia, New Zealand, Canada, South Africa, the United Kingdom, New Zealand, the United States and Papua New Guinea. The company's brands include Flight Centre, Great Holiday Escape, Corporate Traveller, Travel Associates, Student Flights, Overseas Working Holidays, VFR Flights, SBT Business Travel Solutions, Conference and Incentive Management, Convention and Incentive Services and Stage and Screen Travel and Freight Services.