Flight Centre expects to grow its pre-tax profit by up to eight per cent over the next 12 months despite taking a hit from cheaper airfares and a downturn in consumer spending following the Federal Budget.

The company’s net profit fell 16 per cent to $206.9 million for the year to June 30, after being hit by one off writedowns and $11 million in fines from the Australian Competition and Consumer Commission (ACCC). 

Flight Centre’s earning results coincided with news it was buying a 90 per cent stake in the UK-based travel company, Topdeck Tours, for STG21.84 million ($A39.86 million).

Flight Centre said Topdeck would complement its other UK coach tour business, Back-Roads Touring.

Topdeck’s boss, James Nathan, who is also Flight Centre’s partner in Back-Roads, will hold the remaining 10 per cent stake in the British tour operator.

Flight Centre founders, Graham Turner and Geoff Lomas, set up Topdeck in 1973.

Topdeck specialises in overland trips for tourists aged 18 to 30 across Europe, Australia, New Zealand, North Africa, North America, and the Middle East.

Meanwhile, Flight Centre said it hit new sales and underlying profit milestones during 2013/14.

Revenues jumped 13 per cent to $2.2 billion, while underlying net profit, which excludes the writedowns and fines, rose by nearly 10 per cent to $263.6 million.

It forecast an underlying pre-tax profit of between $395 million and $405 million for 2014/15, a rise of up to eight per cent on the $376.5 million it made last financial year.

It believes its first half profit will be similar to the same period last year, with most of the growth coming in the final six months of the year.

Sales rose moderately in the Australian leisure business during June and July after a flat period in May, which was hit by a downturn in consumer confidence following the federal budget.

However its key total transaction value (TTV) figures – or the price it sells travel products and services as an agent for airlines and tour operators – are being hit by cheap airfares to Asia and Europe.

“While we cannot predict a timeframe for full recovery, our experience shows that short-term downturns are often followed by healthy uplifts in demand as Australian leisure travellers get itchy feet and take off to ensure they make the most of their holiday time,” Turner said.

Flight Centre lifted its final dividend by six cents to 97 centre.

AAP

AAP