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Flight Centre buys Topdeck, stays doggedly profitable

August 28, 2014 Corporate, Headline News No Comments Email Email

egtmedia59Flight Centre’s ability to turn a decent profit is almost legendary and it has pulled the rabbit out of the hat again, despite an ACCC fine and some writedowns. It has also bought Topdeck Tours, in some ways a return to its roots.

The British touring company was where the global travel business started in 1973 when Graham Turner and Geoff Lomas bought some old London buses, fitted them with beds and drove Aussies around Europe.eGlobal Media-ÃÇÁ

Flight Centre is taking a 90% stake in Topdeck, adding it to its coach operation which already has 67% of Back-Roads Touring (originally founded by Bruce Cherry), ABC News reported yesterday.

At the same time, Flight Centre posted a 16% fall in full-year net profit to AUD 207 million. The result is in line with expectations. It was hit by a AUD 11 million fine from the competition watchdog ACCC (which the company is appealing) as well as asset writedowns in the US and India.

But for those one-off costs, Flight Centre says, it made a record underlying profit of AUD 376.5 million and had record transaction value in excess of AUD 16 billion. That’s why it believes now is the perfect time to take the majority stake in Topdeck.

The ABC noted that Flight Centre’s international business is starting to improve.  Revenue from offshore activities rose 21%, and this is expected to continue, albeit at a slower pace.

The company says it is conscious of the need to remain relevant in the face of competition from global travel sites like TripAdviser, Agoda and Expedia, the latter of which is buying Australian travel site Wotif.

Written by : Peter Needham

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