Australia's Flight Centre hits 3-month high on buyback plan, outlook cut caps gains (updated)

Flight Centre Travel

Wed 07:27

Announces A$200 million share buyback
FLT sees FY26 UPBT at A$275 million-A$295 million
Says U.S.-Iran peace deal to bolster FY27 earnings
Australia eases advice on Gulf travel
Recasts throughout, updates with further details

    June 17 (Reuters) - Flight Centre Travel FLT.AX unveiled a new share buyback plan of up to A$200 million ($141.16 million) on Wednesday, sending its stock to a three-month high, but gains were capped as it trimmed its annual profit forecast on Middle East tensions.
The travel company aims to repurchase A$200 million worth of shares over the next 12 months. It wrapped up its previous buyback plan worth A$200 million in April. 
Shares rose as much as 6.6% to A$12.595, marking their highest level since early March.
Flight Centre now expects underlying profit before tax (UPBT) for the year ending June 30 to come in between A$275 million and A$295 million, down from its previous target of A$310 million to A$345 million.
The earnings downgrade is larger than expected, but not completely out of the blue, said Wei-Weng Chen, an analyst at RBC Capital Markets, adding it appears contained to the leisure segment.
The fourth-quarter disruption from the war in the Middle East is expected to slash leisure earnings by about A$50 million, compared with previous expectations of A$10 million, the company said.
Its touring business is likely to take a hit of roughly A$5 million along with an adverse foreign exchange impact between A$5 million and A$10 million, it added.
Its global corporate business is on track to be profitable for the year, it said, adding that the peace agreement between the U.S. and Iran — which is being mulled over this week — should act as a tailwind to earnings in 2027.
Australia relaxed its travel advice for several Middle Eastern countries on Wednesday, which Chen noted as another positive development for Flight Centre.
The easing in travel advice allows Australians to transit through and travel to the biggest Gulf air hubs with the security of being covered by insurance.

($1 = 1.4168 Australian dollars)

 (Reporting by Jasmeen Ara Shaikh and Roshan Thomas in Bengaluru; Editing by Anil D'Silva and Janane Venkatraman)
 ((Jasmeenaraislam.shaikh@thomsonreuters.com;Roshan.Thomas@thomsonreuters.com))