Flight Centre expects its underlying profits to take off this year as Australians shrug off their post-budget blues and the industry enters a "golden era of travel".
The travel group's net profit fell 16 per cent to $207 million in the year to June 30, after being hit by one-off writedowns and $11 million in fines from the Australian Competition and Consumer Commission.
It expects underlying profits to increase by up to eight per cent this financial year as cheaper fares and more choice usher in a "golden era of travel".
However investors were not impressed with the forecast and pushed Flight Centre shares down 41 cents to $47.02.
"Flight Centre has been tagged as a market darling for quite some time with the expectation that we're going to see some double-figure earnings growth over the next three, four, maybe even five years," said OptionsXpress market analyst Ben Le Brun.
The company's underlying profits, which excludes writedowns, rose by almost 10 per cent to $263.6 million in fiscal 2014.
Chief executive Graham Turner says further growth will depend on Australian consumer confidence picking up in the second half of 2014/15.
"Growth in the Australian market, we think, is going to be broadly in line with last year," he said.
"Corporate travel, we can plan reasonably well ahead but leisure does depend a lot on consumer sentiment."
Both the local leisure and corporate divisions were hit hard in the final quarter of 2014, despite posting full year profits.
"Over the last few months the profit growth has slowed and we're blaming the federal budget, or the lack of the federal budget," Mr Turner said.
Wednesday's results coincided with news of Flight Centre's purchase of a 90 per cent stake in UK-based company Topdeck Tours for STG21.84 million ($A39.86 million).
The international tour business, targeting 18 to 30-year-olds, was started by the founders of Flight Centre in the early `70s.
Meanwhile, the company is assessing some small acquisition possibilities for the coming year.
FLIGHT CENTRE FORECASTS PROFIT TAKE-OFF
* Net profit of $207m, down 16 pct from $246m in 2012/13
* Revenue of $2.244b, up 13 pct from $1.985b
* Final dividend of 97 cents per share, from 91 cents
Share
