Flight Centre managed to break a stream of financial records during the 12 months to June 2015 despite a slowdown in leisure sales.
For the 2014/15 year, the Group delivered a record $17.6 billion in Total Transaction Value (TTV), up $1.55 billion on the prior year.
Australian agents and businesses made an additional $445 million in transactions during the 12 months compared to the 2013/14 corresponding period, despite what Flight Centre Managing Director Graham Turner admits was a “reasonably flat trading environment”.
Underlying Profit Before Tax was slightly down by 3.4 percent. This result was affected by lower commission earnings in Australia (a decision made by leisure consultants to stimulate demand); a slight change in product mix; and an additional component of accommodation TTV for the first time.
Graham Turner, Flight Centre Managing Director
Despite the minor dip in underlying results, the group did embrace a new record in Statutory Profit Before Tax (PBT) of $366.3 million – up 13.1 percent on the $323.8 million earned during the last financial year.
Turner attributed record figures to strong profits overseas, particularly from the USA and UK, which together generated a record of $103.6 million in Earnings Before Interest and Tax (EBIT) – more than double the contribution made four years ago.
“These achievements over a 20-year period highlight Flight Centre’s ability to innovate and to adapt to changes in the industry dynamics and consumer behaviour.”
Graham Turner, Flight Centre Managing Director
Adapting to changes, Flight Centre in recent years has expanded its business beyond the retail stores to include new revenue streams.
These include niche sectors such as Student Flights, Cruiseabout and Travel Money – these three segments delivered $1.2 billion during the 2014/15 period.
There’s also the expansion into tour operator with the purchase of Back-Roads, Top Deck and Buffalo Tours – these are expected to generate TTV of $200 million during the 2015/16 financial year.
Meanwhile, the group continues on its journey to become the world’s best person-to-person travel experience retailer. This will be achieved through the ‘Killer Theme’ of having world class and specialised brands; selling its own products not just others; being experts, not agents; working from branded business spaces; offering customers blended access; using information as power; and creating a sales and marketing machine.
With all that in mind, Flight Centre says it is targeting an underlying PBT of $380 million and $395 million, which represents a four – eight percent growth on the 2014/15 result.
“Overall, Flight Centre has started the new year reasonably and, based on year-to-date trading results, is currently tracking broadly in line with its annual PBT growth target.”
Graham Turner, Flight Centre Managing Director
Turner said consumer confidence in Australia is seeing positive momentum in leisure and agents are seeing an increase in customer enquiry and sales.
