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Flight Centre outlook downgrade dampens share price

May 24, 2016 Headline News No Comments Email Email

egtmedia59Flight Centre shares fell almost 9% yesterday afternoon after the group issued an outlook downgrade.

Flight Centre said the group was on track for record sales but profit was likely to be below initial guidance.

The Australian pointed out the downgrade came just 17 days after the group affirmed its earlier forecasts.

The travel agency group, Australia’s biggest, now foresees full-year underlying profit before tax falling 2% to 5% below the AUD 366.3 million reported last year. Earlier expectations tipped 4% to 8% growth.

Flight Centre shares yesterday

Flight Centre shares yesterday

Profits during the seasonally stronger second half were being affected by increasing uncertainly in some key markets, over issues like the coming Australian federal election in early July and the ‘Brexit’ vote in June to determine whether Britain stays in the European Union, Flight Centre managing director Graham Turner said.

Airfare discount price wars in Australia, Britain, the US and India were other factors.

“While we will be disappointed to miss the short-term profit target we set in August last year, we are investing significantly in our future and in the strategies that will underpin our longer-term growth.”

The group said the result would still represent its third highest profit, on the back of record sales figures.

Written by Peter Needham

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