Flight Centre has upgraded profit forecasts and its shares are rocketing higher

Photo: Scott Barbour/ Getty Images.

Flight Centre has reported a profit before tax of $139.4 million for the six months to December 2017, up 23.2% from the same time last year.

The result was above guidance $120-135 million, and the company has upwardly revised its full-year forecasts for the 2018 financial year.

Shares in Flight Centre rose by as much as 15% in early trade, and a short time ago were around 10% higher at $54.40:

Net profit after tax grew more rapidly, climbing by 37% to $102 million as the company benefited from the recent changes to the US corporate tax rate.

“Given the strategic progress we have made and our positive start to the year, we now believe that our profit will finish slightly higher than initially expected and we have adjusted our guidance accordingly,” said managing director Graham Turner.

“The mid-point in this new range — $372.5 million — is 13% higher than the underlying FY17 result ($329.5 million) and within reach of the recording underlying profit before tax of $376.5 million that Flight Centre achieved in the 2014 financial year.”

The company reported an 8.7% increase in global revenue to $10.16 billion. The increase was achieved despite a small decline in the number of sales staff, which the company attributed to improvements in productivity.

Turner said the strong result was also due to Flight Centre’s effective execution of its global diversification strategy.

“While Australia was again the largest contributor to group results, Flight Centre’s overseas businesses predominantly drove overall growth — generating a record #38.2 million in first-half profit before tax and almost half of the group’s total transaction value during the period.”

The company declared an equal-record high interim dividend of 60 cents per share.

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