2002

Flight Centre Limited continues record growth run

Thursday, 29 August 2002

Flight Centre Limited has achieved another year of record growth, with profit and turnover figures for the 12 months to June 30, 2002 surpassing previous results. The company today reported a $91 million pre-tax profit for the 2001-2002 fiscal year, up 37% on the previous year, and revenue of $3.6 billion, a 20% increase on the 2000-2001 result. Australia’s leading travel retailer also announced a 45% increase in operating profit after-tax to $62 million and a fully franked final dividend of 25 cents a share, making a total of 37.5 cents for the year. The dividend is payable on October 11, 2002 to shareholders on the register at September 27, 2002. Flight Centre Limited chairman Norman Fussell said the company had increased its presence from 778 stores and businesses at the end of the 2000-2001 fiscal year to 975 at June 30, 2002. Mr Fussell said the company had performed solidly and had continued to expand through organic growth and with the acquisition of businesses in Australia and New Zealand, despite the challenges that arose during the year. "Flight Centre Limited has traded solidly in 2001-2002 and its people can be pleased with their achievements in a difficult year," he said. "A number of areas made significant contributions to the company’s overall results, with the Australian operation in particular performing strongly. "In Australia, valuable contributions came from Flight Centre brand in New South Wales and the five business travel brands that make up our Corporate Division Corporate Traveller, SBT Business Travel Solutions, Stage&Screen and conference specialists CIM and CIS. "In addition, on-line and telephone business Flight Centre Direct improved significantly in 2001-2002 after posting disappointing results the previous year. "The company also benefited from an increased focus on domestic tourism in Australia, which led to a significant increase in sales of high yield land-based travel product." Mr Fussell said the company’s international operations had enjoyed a mixed year, with North American businesses hardest hit by the adverse market conditions and South African results affected by the weak local currency. "Challenges also arose in New Zealand and the United Kingdom, but these operations were able to post pleasing results," he said. "In New Zealand, pre-tax profit in Australian dollars increased by 28% and turnover increased by16%. In the United Kingdom, profit in Australian dollars increased 115%, in a travel market that was affected by reduced capacity on key international routes." Flight Centre Limited managing director Graham Turner said results in Eastern and Western Canada had been heavily affected by international events and market conditions, but the company’s United States operation had continued to improve in its second full year of business. "The rate of loss in the United States has decreased significantly in 2001-2002 and our aim, as it is in other markets, is to reach a stage of profitable growth at which time we can start expanding more rapidly," he said. "Expansion has also continued in Canada, with our operation in the West now including six stores in the Alberta province." Mr Turner said the company had developed a stronger technological base during the year and had significantly enhanced its "web" capabilities.He said the technological developments had seen the Group bring all of its information technology operations together in a new company, Flight Centre Technology Pty Ltd. "Flight Centre Technology will hold all software licences and hardware for the Group and its introduction means the company now has an independent IT operator that can source improved wholesale deals, thereby improving Flight Centre Limited’s global buying power," Mr Turner said. "Flight Centre Technology will have a global focus and will deliver end-to-end solutions in new software and infrastructure projects. The company will also target external business, by leveraging off current products and services and selling into the external market." Mr Turner said Flight Centre Limited’s $40 million recommended takeover of ITG Limited had also given the company a new IT business in Lumina Technologies, a travel technology team that developed and deployed the corporate self-booking product, Lumina e3. He said Flight Centre Limited had already benefited from the ITG acquisition, with the business recording turnover of $100 million and a $1.3 million profit in its first three months as part of the Flight Centre Limited group. At June 30, Flight Centre Limited had 587 shops and businesses in Australia, 117 in New Zealand, 80 in South Africa, 72 in the United Kingdom, 51 in Eastern Canada, 50 in Western Canada and 14 in the United States, plus four other businesses.