Small cap wrap: Flight Centre, Danks Holdings
Tuesday, February 26, 2008/
Travel agent Flight Centre has posted a 19% jump in net profit for the first half, thanks to a strong tourism market boosted by a strong economy and the Australian dollar at two-decade highs. Profit rose to $62.6 million from $52.7 million for the six months to 31 December 2007.
Revenue grew 25.1% to $642.9 million, reflecting healthy sales, margin improvements and changes to Flight Centre’s product mix. Flight Centre said it had increased its forecast for full-year pre-tax profit to a minimum $200 million.
Hardware wholesaler and retailer Danks Holdings posted modest revenue $303.5 million for the six months to 31 December 2007, up just 1% on the same period the previous year. Profit after tax at $2.60 million was up 8%.
The company blamed lower housing starts, contracting consumer confidence and some small store closures for sluggish sales growth. Sales in its largest segment, Home Timber and Hardware, were up 2% on last year.
Trading margins fell by 0.4% as the lower margin parts of the business made more sales. The company said business costs were contained, except freight costs have rose dramatically above last year, mainly due to fuel surcharges.