For about the third time so far this financial year travel group, Flight Centre has upgraded its fiscal 2010 guidance, and the shares take-off.
The company told the market yesterday that it was continuing to trade ahead of expectations.
Flight Centre said that based on current trends, it should achieve a pre-tax profit of between $190 million and $200 million, excluding any major non-recurring items that may arise.
Previously, the company was targeting a $160 million to $180 million result, as it said in an update in January for the full year result.
That was maintained in the interim report a month later and upgraded yesterday.
As a result, Flight Centre shares jumped $1.06 to a day’s high of $17.40.
They then fell as the day went on and sentiment turned more bearish.
They shared closed up 48c, or 2.9%, at $16.80.
Good as that gain was, it still left Flight shares well under the $21.43 peak in mid April and the $19.91 level reached after the January upgrade.
Managing director, Graham Turner, said the anticipated profit, which would be the company’s second strongest full year result, represented 90% to 100% growth on the $99.8 million normalised 2009 pre-tax result.
"The encouraging results and momentum we reported at the first half have continued," Mr Turner said.
"Sales volumes have remained healthy globally and trading conditions have gradually started to improve in most of our overseas businesses during the second half.
"The Australian business has continued to perform strongly and has not yet experienced the slowdown in demand that some retailers have reported recently."
Flight Centre said New Zealand and Canada had recorded significant year-on-year growth, while its UK business should again make the largest profit contribution of any of the company’s international businesses.
In the US, losses have decreased substantially year-on-year.
"The corporate business is again trading profitably, wholesaler GoGo continues to contribute positively and the Liberty retail network is on track for healthy profits in the peak May-June booking period," Mr Turner said.
Flight Centre’s record full year profit was achieved in 2007-08, when the company reported a $212.3 million pre-tax result in superior trading conditions (and when the Australian dollar last traded at these levels of between 80 and 90 USc).
Mr Turner said the company continued to monitor the effects of recent world events, including the unrest in Bangkok, temporary closures of European air space and fluctuations in the Australian dollar.
"Each of these factors will affect results to a degree, but we do not currently anticipate any material impacts," Mr Turner said.
"Early indications from Bangkok are that few travellers intend to cancel, with most bypassing areas of concern and continuing with their holidays.
"Despite some recent falls, the Australian dollar remains at attractive levels by historical standards and adverse currency movements also continue to be offset by the savings that are available on international airfares."
Mr Turner said fares generally remained well below traditional levels and in some cases were comparable to those achieved during the height of discounting last year.
