Travel agent Flight Centre shares took a hammering yesterday despite a higher profit and dividend.
What worried investors were reports media reports alleging the gouging of customers, underpaying staff, and the harassment and sexually explicit conduct toward female employees.
The shares fell 9% at one stage yesterday, despite the 14.5% increase in net profit after tax to $264.21 million.
Underlying profit before tax rise 16.8% to $384.7 million – $55.2 million higher than 2016-17 and $8.2 million above the record $376.5 million 2013-14.
The total transaction value (TTV) was a record $21.8 billion, up 8.5%, while revenue was up 6.5%, to $2.95 billion.
The company declared a fully franked $1.07 final dividend (up from 94 cents a year ago), bringing the total payout to shareholders for the year to $1.67 a share, up from $1.39 a year ago.
But investors ignored that and focused on the media reports – first aired by the ABC’s 7.30 program on Wednesday night and sold off the shares. They ended the day down 8.1% at $61.68.
Directors said the results highlighted the strength of the company’s business model, its ongoing relevance to customers globally and its increasing diversity.
Flight Centre’s international business did better than the company’s Australian and NZ operations where transaction growth ran at about 4% in the year.
Businesses in the Americas, Europe, the Middle East and Africa generated about 40% of underlying profit and Flight Centre said profit in the Americas more than doubled.
In fact the Americas and the EMEA (Europe Middle East Africa) businesses together generated a $151 million profit, more than doubling combined results from just two years ago.
“To put these combined results in context, about 40% of FLT’s underlying FY18 PBT (profit before tax) came from the Americas and EMEA, compared to just 15% five years ago,” CEO Graham Turner said yesterday.
“This is a promising sign for the future, given the size of these markets – particularly in corporate travel – and our relatively small market-share.
“While there is still work to be done in the leisure sector, we are also starting to see some positive signs, with the Canada and US leisure businesses profitable for the first time since FY11 and FY12 respectively and the UK leisure business recording solid profit growth,” Turner said.
