By Matt O'Sullivan
Travel agency group Flight Centre has nearly quadrupled its annual profit to $140 million after record ticket sales helped pull its operations out of one of the worst downturns in travel due to the global economic downturn.
Shares in Australia’s largest travel agency surged 4.4 per cent, or 82, to $19.27 this morning, after its delivered a record full-year profit. Other travel-related stocks, Webjet and Wotif, are largely flat this morning.
Flight Centre said it expected further profit growth this financial year ‘‘despite some ongoing volatility’’.
It is forecasting a pre-tax profit of between $220 million and $240 million in 2010-11, compared with about $199 million in the year to June 30.
The managing director, Graham Turner, said the company had notched up record ticket sales despite the fact that global economic conditions were yet to fully recover.
The travel company has been benefiting from a strong Australian dollar encouraging people to travel overseas. Flight Centre makes a substantial portion of its earnings from outbound travel.
Mr Turner said Flight Centre had started the new financial year with ‘‘good momentum’’ and recorded healthy profit and sales results in July.
‘‘While it is extremely difficult to forecast results at this early stage, we will be disappointed if we don’t improve on last year, given the momentum established in 2009-10,’’ he said.
The company’s US business – the second-largest after Australia – narrowed its losses to $2.3 million for the year after its corporate operations returned to profitability in the second half.
Its Liberty retail business in the US was also profitable in the second half, which is traditionally the peak booking season for US travel agencies.
Liberty has dogged its Australian parent since it was bought for $US135 million in late 2007.
Flight Centre will pay a final dividend of 44 cents, fully franked, a share on October 7, taking the payout for the year to 70 cents. It compares with a payout of just 9 cents in 2008-09.
mosullivan@smh.com.au