Flight Centre faces profit hit as holidaymakers stay home

Shares dived on the news, and closed 5.4 per cent lower at $40.07.

Mr Turner said the fall in profit was driven by the Australian leisure market, as macro-economic headwinds saw fewer people take overseas holidays.

The business also faced a $4 million hike to its wages bill from a new enterprise bargaining agreement, system changes, “network issues” and growing costs.

“We accept that our Australian leisure business will take longer to recover than initially anticipated,” Mr Turner said.

Profit would recover in the second half, he said, as strategies for improving the business kick in, and profit from recently increased stakes in offshore businesses start to flow.

Flight Centre said that its full-year underlying profit would come in between $310 million and $350 million. That bracket represents between a 10 per cent decline and 2 per cent growth on last year’s $343 million result.

“We will be disappointed if we can’t top our FY19 result, but unfortunately we don’t yet have
20-20 vision,” Mr Turner said.

Shareholders voted in favour of the company’s remuneration report (97 per cent in favour) and for the re-election of chairman Garry Smith (85 per cent in favour).


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