Flight Centre (FLT) shares dipped 0.8% yesterday, to end at $4.702 after the company met guidance for another record profit, and revealed plans to buy a travel company based in the UK and which was started by group founder Graham Turner.
The company told the ASX that underlying profit before tax rose 10% to $367.5 million.
The shares weakened despite the company forecasting a small rise in earnings for the year to June 2015.
The company said it was looking for a 5% to 8% rise in underlying profit before tax, to between $395 million to $405 million in the 2015 financial year.
Flight Centre said it would target a first half result broadly in line with the prior year and aim for accelerated growth in the second half.
The company said sales had increased modestly in the Australian leisure business in both June and July after a flat May brought on by the loss of consumer confidence after the federal budget.
"While we cannot predict a timeframe for full recovery, our experience shows that short-term downturns are often followed by healthy uplifts in demand as Australian leisure travellers get itchy feet and take off to ensure they make the most of their holiday time," Mr Turner said.
"The cheap airfares we are seeing create exciting travel opportunities for our customers and we will continue to proactively promote the best deals."
Flight Centre directors declared a final dividend of 97c a share (up 6c a share), taking the full year figure to a record $1.55 a share (the interim was 55c a share), up 11% from 2012-13.
FLT 2Y – Flight Centre makes guidance, dividends, shares dip
In July, the company said it expected to report a record underlying profit before tax of $375 million to $377 million, based on total transaction value of more than $16 billion.
But it did warn that profit would be cut by a series of one-offs from write-downs to its businesses in India and the US, a fine from the competition regulator the ACCC (which is being appealed), offset by a gain within its global product group business.
As a result, its statutory profit before tax fell by 7% to $323.8 million.
Releasing the results yesterday, the company said it would acquire 90% of Topdeck Tours, a company founded by Mr Turner, Flight Centre’s founder and managing director.
The deal values Top Deck at a minimum of $38.82 million.
Mr Turner had started the young travellers’ tour operator in 1973 and still owns a 4% stake, which will go to Flight Centre as part of the deal.
Flight Centre said Topdeck would complement its other UK coach tour business, Back-Roads Touring.
Topdeck’s boss James Nathan, who is also Flight Centre’s partner in Back-Roads, will hold the remaining 10% stake in the British tour operator.
Topdeck specialises in overland trips for tourists aged 18 to 30 across Europe, Australia, New Zealand, North Africa, North America and the Middle East.
