SYDNEY (Reuters) - Australia's biggest listed travel agent, Flight Centre Travel Group Ltd <FLT.AX>, reported a 5.6 percent fall in full-year profit on Thursday, a more modest drop than the market was expecting that pushed its shares to a three-year high.
The fall was cushioned by a rise in second-half earnings thanks in part to airfares lifting from record lows, the company said, pointing to the end of a price war that has prompted a string of earnings downgrades.
Net profit for the 12 months to June 30 fell to A$230.8 million ($182.33 million) from A$244.6 million a year ago. That beat an average forecast of A$224.1 million from 9 analysts polled by Thomson Reuters I/B/E/S.
"The combination of the result, plus a good outlook, is clearly supportive," said Michael McCarthy, chief market strategist at stockbroker CMC Markets.
Flight Centre shares jumped 8.7 percent to A$48.30, their highest since June 2014, while the broader S&P/ASX 200 index <.AXJO> was flat.
The company which mostly relies on selling flights and holiday packages in its stores in Australia, cut its guidance in February because record-low airfares had lifted sales, but not revenue or profits.
"During FY18, FLT currently expects a more normal environment, with modest fare decreases or increases, rather than steep discounting across the board," the company said in a statement on Thursday.
Flight Centre also said profit from its United Kingdom business was hit by adverse foreign exchange movements, and reported falling earnings from some smaller businesses in Asia and the Middle East.
The company did not provide specific guidance for the current financial year, but announced a cost-cutting strategy and a focus on growing digital sales. The company declared a final dividend of 94 Australian cents per share, up from 92 cents a year ago.
($1 = 1.2658 Australian dollars)
(Reporting by Alison Bevege; Editing by Stephen Coates)
