2003

Record sales help Flight Centre Limited to solid half year

Thursday, 27 February 2003

Flight Centre Limited achieved record global sales in the six months to December 31, 2002, with turnover topping $2 billion for the first time in a half year. In announcing its audited half year results, Australasia's leading travel retailer today revealed that a 37% increase in sales had helped it achieve a record profit during the first half of the 2002-2003 fiscal year. The global sales increase boosted the company's total revenue for the period to $2.14 billion, a 37% increase on the corresponding half in 2001-2002 and a record sales result for any half-year. Pre tax profit for the half increased 47% to $44.94 million, while profit after tax jumped 49% to $31.11 million. The company opened 140 new stores in the six months, giving it 972 shops and almost 5000 employees at the end of the 2002 calendar year. Flight Centre Limited also recorded significant growth in the three months to December 31, 2002, in comparison to the previous corresponding quarter. Revenue in the second quarter increased 40% to $1.05 billion, pre tax profit increased 36% to $22.54 million and profit after tax jumped 38% to $15.61 million. Basic earnings per share for the half year were 35.3 cents. The company declared a fully franked dividend of 18.5 cents a share, a 48% increase on the 12.5 cent dividend from the corresponding half year, payable on April 29 to shareholders on the register at April 22. Flight Centre Limited chairman Norman Fussell said the solid first half results had helped the company establish a sound base for the full year. "While it is important to recognise that the corresponding half's results were affected by the events of September 11 and the demise of several airlines, Flight Centre Limited and its people can take great pride in the achievements of the first half of this year," he said. "Our profit and revenue results have set new records for a first half, but it is particularly pleasing to note the significant growth in sales. This growth saw sales reach a new high for any six-month period in the company's 22-year history. "At this time, we are unable to predict our ability to maintain our traditional trading patterns in the second half of this year because the ongoing threat of war continues to restrain revenue and profit growth." Mr Fussell said the company's Australia and New Zealand operations had built on their success of the previous year, posting pre tax profit increases of 46% and 45% respectively in Australian dollars. He said South Africa had also recorded good results, including a 47% pre tax profit increase in Australian dollars, while both Western and Eastern Canada had started to rebound after feeling the financial effects of September 11. Mr Fussell said expansion had also continued in Canada, with Flight Centre Limited now having more than 100 retail stores in the country's western and eastern regions, including eight stores in Alberta. In the United Kingdom, a 51% increase in shop numbers, from 49 to 74, helped revenue increase by 43%, but also contributed to a reduction in profit when compared to the corresponding half year. In the United States, shop numbers increased from 11 to 15 and revenue in Australian dollars increased by 32% compared to the previous corresponding half year. Operating losses were similar to those recorded in the six months to December 31, 2001 at $2.6 million. A new Flight Centre store has now opened in Chicago, Illinois. Flight Centre Limited managing director Graham Turner said the company's international growth would continue in the second half of 2002-2003, with the company's 1000th retail store now open and the 400th international shop to follow in April. Mr Turner said two leisure brands, youth travel operation Student Flights and package holiday specialist Great Holiday Escape, had been earmarked for significant expansion in Australia. "We are also looking forward to the contributions from two of our most recent corporate travel acquisitions, ITG in Australasia and American International Travel in Hong Kong," he said. "ITG contributed more than $1 million to our pre tax profit in the first half, while AIT recorded sales of more than $17 million in the four months since its acquisition."