Media Release 21 July 2008
Flight Centre Financial Results
FLIGHT Centre Limited (FLT) has today released preliminary financial results for 2007/08 and reaffirmed its expectations
for 2008/09.
Following a solid finish to the year, FLT expects to report 40 per cent growth in pretax profit for the 12 months to
June 30 2008 when it releases its audited full year accounts on August 26 2008.
FLT believes its final result will be in the order of AUD$212million, within the range outlined in its current market
guidance, compared to its record AUD$151.6million result in 2006/07 (excluding the abnormal gain on the sale of FLT’s
Brisbane head office property in September 2006).
As announced previously, the company will be disappointed if it does not achieve a further 10-15 per cent pretax profit
growth during 2008/09.
Chief financial officer Shannon O’Brien said FLT’s established businesses in South Africa, New Zealand and the United
Kingdom were expected to drive profit growth during 2008/09, along with Australia, where the strong dollar, near full
employment and the availability of cheap international airfares continued to stimulate demand.
“With the momentum we have built globally and the strategies we have in place for overall improvement, we start 2008/09
in a position of strength,” Mr O’Brien said.
“Our businesses continue to perform reasonably well, particularly in our established markets, and there is opportunity
to grow our leisure, wholesale and corporate travel brands in all geographies. As we continue to develop, our focus will
be on organic expansion but we will also consider strategic acquisitions and joint ventures in niche and growth sectors
from time to time.”
Mr O’Brien will temporarily serve as FLT’s acting chief executive officer for the remainder of 2008 and for the early
months of 2009, while Graham Turner takes long service leave. During this period, he will head an experienced senior
management team that has been in place three years.
Mr Turner said the business was well placed to continue its growth trajectory during 2008/09, with strong foundations
developed and key business improvement strategies initiated.
He said strategic priorities included:
• Attracting and retaining the right people • Growth in core, specialist and new businesses • Developing an
integrated and aligned approach to sales, customers and marketing • Achieving an integrated global product and
buying system; and • Accelerating global growth in FLT’s corporate travel business.
In North America, FLT expects further profit growth from its small but expanding corporate operations and reduced losses
from its Canadian and United States leisure businesses.
Following Liberty Travel’s formal acquisition five months ago, comprehensive integration and restructuring projects are
underway and are expected to gain momentum during 2008/09 as FLT seeks to modernise and reinvigorate the 57-year-old
family-run business in the short-term and to improve longer term performance. As key restructuring and improvement
initiatives are in their infancy and are yet to gain traction, FLT does not currently expect Liberty~to contribute
to~the company's profit growth this year.
In a sluggish trading cycle, Liberty’s new management team’s priorities include sales, margins, productivity, shop
location and design, customer enquiry and IT systems and expenditure.
As part of the ongoing focus on overhead reductions and developing more streamlined support structures,180 fulltime and
contract roles have been rationalised during the past five months.
Flight Centre leisure travel shops in Los Angeles and Chicago have now been rebranded as Liberty, to leverage off the
business’s superior brand strength in the United States. FLT will also initiate a proven global strategy, and at the
same time launch a new era of growth for Liberty, by developing a specialist corporate travel offering to operate
alongside its leisure travel operation.
“North America, and the $70billion-a-year US offline leisure travel market in particular, represents both a challenge
and an exciting future opportunity,” Mr Turner said. “We are making progress in the leisure sector, while continuing to
make major inroads into the corporate and wholesale markets, and are confident that we have the right people and the
right initiatives in place to deliver sustainable improvement in time.”
ENDS