Earnings Down: FLT/Sun/ALL Down As Forecast

  Flight Centre (FLT) has reported a 57.4% fall in first half profit after global sales slowed in the travel sector and it has hacked into its interim payout to shareholders to conserve cash, like so many other reporting groups are doing.The result, released just before the market closed, saw the shares sold off quickly by 9.2% to & #36;5.35, a 52 week low and a long way from where the private buyout activity was priced at around & #36;17.The Brisbane-based company's net profit for the December half year fell to & #36;26.1 million, from & #36;61.2 million in the previous corresponding period.But it declared a reduced interim dividend of 9 cents, compared with the 37.5 cents a share paid out a year ago. & quot;While the company does not currently intend to alter its policy permanently, FLT's board believes the reduced pay-out is prudent in the current climate, & quot; directors said in their report yesterday. & quot;The board will continue to consider FLT's growth requirements, its current cash position, market conditions and the need to maintain a healthy balance sheet, when determining future returns. & quot;So if profits continue at their current rate, the final will be cut as well.The company said its result reflected losses incurred by the Liberty travel agency business in the US, which it acquired in late 2007, as well as sluggish sales. & quot;Sluggish sales globally during the second quarter impacted on FLT's results, following a reasonable first quarter, & quot; the company said in a statement with the results. & quot;The current volatility in world economies continues to affect consumer confidence globally,'' Flight Centre founder and returning managing director Graham Turner said in a statement on Tuesday. & quot;While demand in some travel sectors has remained healthy, the slowdown in global sales the company experienced in November and December, after a reasonable first quarter, has continued into January and February.'' & quot;In a challenging global trading cycle during the six months to December 31, 2008, the company's established businesses (excluding United States acquisition Liberty) achieved a & #36;77.7million pre-tax trading profit. & quot;This compares to a record & #36;90.9 million pretax profit in superior trading conditions during the previous corresponding period and a & #36;53m trading result two years ago. & quot;As announced previously, losses and non recurring restructuring expenses within Liberty, which was acquired during the second half of 2007/08, and one-off losses within FLT's global investment portfolio significantly affected FLT's overall performance during the first half. & quot;These combined losses amounted to & #36;43.5 million, giving FLT an actual pre-tax result of & #36;34.2 million, in line with recent guidance. & quot;The company said its & quot;cash and investment portfolio was & #36;657million, compared to & #36;631.9 million last year. & quot;Currently, about 78% of the overall portfolio is cash, 19% is in fixed income investments and 3% is in corporate collateralized debt obligations (CDOs), half of which are due to mature late in 2010. & quot;The CDOs relate to blue-chip US corporations and are not directly exposed to subprime mortgage products. & quot; & quot;The ongoing uncertainty that saw sales growth stall during the second quarter after a reasonable first quarter means that FLT is not currently in a position to provide meaningful guidance in relation to its likely full year result at this time.  

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