SYDNEY -- Flight Centre Limited (ASX: FLT.AX) has released a profit upgrade today, with Profit Before Tax, or PBT, expected to come in between $285 million to $290 million, which is at the top of the range outlined in previous guidance.
The expected result is 16% to 18% higher than the previous year’s $245.2 million underlying PBT, and well above its initial target of $265 million to $275 million.
According to the company, Flight Centre has not suffered the same sales slowdown affecting discretionary retailers, thanks to its brand and global diversity. Managing director Graham Turner said that "It is no longer correct to think of Flight Centre as a purely Australian based retail travel agency."
Corporate travel and international operations are now delivering solid earnings, complementing the core Australian business. Flight Centre’s operations in all 10 countries were profitable for the second successive year, with record profits achieved in the U.S., the U.K., Dubai, China, Singapore, and Australia. The company also said that U.K. operations were on track to deliver 50% growth in Earnings Before Interest and Tax, or EBIT, despite the financial turmoil in Europe.
Flight Centre declined to provide profit guidance for 2012/13 due to ongoing economic uncertainty in some markets.
The company's shares hit a 52-week low of $16.01 at the start of June, but have recovered since then to trade at $19.28 currently.
If consumers are still spending money on travel in a depressed economic environment, it should be good news for shareholders in Webjet Limited (ASX: WEB.AX), which dominates the Australian online travel booking space, as well as Corporate Travel Management (ASX: CTD.AX) and Wotif.com Limited (ASX: WTF.AX).
Jetset TravelWorld Limited (ASX: JET.AX) appears to be the only loser, with the companies above taking market share, leading to falling revenues and profit downgrades.
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