Flight Centre shares are on a tear as the travel agent hits its promised half year results

Nusa Dua, Bali. Ed Wray/Getty Images

Flight Centre has hit its half year results as promised but says subdued trading, reduced consumer confidence and increased costs are affecting the Australian part of its business.

Revenue grew 4.6% to $1.1 billion for the six months to December.

Underlying profit was 5.9% weaker at $137.6 million. And profit after tax was $100.3 million, down 9.5%.

While the Australian business achieved record sales and generated the bulk of profit, earnings before interest and tax (EBIT) declined 10% compared to the same period the year before.

Combined earnings from Flight Centre’s international businesses increased 25% to a record $25.3 million.

Managing director Graham Turner says Flight Centre continues to target an underlying profit of between $360 million and $390 million for the full 2015 year.

“The outlook in Australia is unclear, but we anticipate some recovery as the year progresses and as travellers start to take advantage of the cheap international flights we are seeing in this golden era for travel,” Mr Turner says.

“We are now heading into what is normally a peak booking period and there is a chance to achieve accelerated growth, given the fourth quarter last year was a comparatively weaker trading period in Australia.”

The company announced a steady interim dividend of 55 cents.

Flight Centre shares are up more than 10% to $38.80.

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