Category: Company News / Tourism / Air Transport / Business, Economics and Finance / Stockmarket

Flight Centre shares dive on further profit warning

Friday, 4 Nov 2016 10:32:28 | Thuy Ong

Flight Centre has issued another profit warning, sending its shares sharply lower as the travel agent says record low airfares, subdued trading and lower-than-expected profits for its Top Deck and Back Roads touring businesses will hit its bottom line.

Underlying first half profit is expected to be between $105 million and $120 million, compared to $145.9 million in the previous corresponding period.

Flight Centre said widespread airline discounting saw the value of international airfares sold during the first half of the 2017 financial year fall 7 per cent.

Geopolitical events - including the Brexit vote, the presidential election in the United States and Zika virus - also negatively affected sales, Flight Centre said.

"Internal and external factors that are currently impacting top and bottom-line results mean that we will not be tracking at those levels by the end of the first half," said managing director Graham Turner in a statement to the ASX.

Underlying profit before tax is expected to come in between $320 million and $355 million for the full year, compared with $352.4 million the previous year.

Shares in the company dropped as much as 14 per cent to $28.52 before recovering slightly.

At 1:07pm (AEDT) shares were down 9.7 per cent to four-and-a-half-month lows of $30.70.

Flight Centre had previously issued another profit warning in May, citing similar difficulties.



 

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