Flight Centre shares lose altitude
SHARES in Brisbane-based Flight Centre shares have fallen as much as 12 per cent after the travel company flagged a lower profit from its Australian business and warned rising oil prices could hit airfares.
Managing director Graham Turner says wage negotiations and the impact of an ABC report alleging it underpaid staff and overcharged customers have hit its local unit.
"Australian profit is currently down compared to the same period last year," Mr Turner told Flight Centre's annual general meeting on Monday. "We believe the disruption is now abating and that this, coupled with various other initiatives and refinements that are underway, will lead to better second half results."
Management expects underlying profit before tax for the six months to December 31 of between $140 million to $150 million, compared to $139.7 million for the first half of FY18.
That indicated underlying profit could be flat or rise as much as seven per cent.
Investors were unimpressed, sending Flight Centre shares to their lowest since January.
At noon, Brisbane time, they were down $4.19, or 8.19 per cent, at $47, having been as low as $45.05 earlier on Monday.
Mr Turner also flagged uncertainty overseas due to the UK's tumultuous negotiations to exit the EU and rising oil prices.
"It's likely ... that airfare prices, which have remained fairly stable, will come under pressure if oil prices continue to rise," Mr Turner said.