Travel agency firm Flight Centre yesterday reported a 12 per cent fall in annual profits after it was hit by higher costs and intense competition.
The Australian-based firm, which has 164 outlets in the UK, including two in Birmingham in the Bull Ring and Colmore Row, selling hotel breaks, flights and package deals, said profits fell to 107 million Australian dollars (£44.8 million) following pressure on margins.
The outcome was in line with revised forecasts after the company warned on profits during the year.
Flight Centre opened its first store in Sydney in 1981 and now has a total of nearly 1,500 outlets in Australia, New Zealand, Canada, the United States, South Africa, Hong Kong, China and the UK. It employs more than 5,660 staff worldwide.
The UK market is one of Flight Centre's biggest growth areas. In March 2003, it bought business travel company Britannic, which provides travel services to medium and large companies.
Flight Centre said Britannic performed in line with expectations, while its UK retail division saw a "reasonable" one million Australian dollars (£420,000) profits jump in the year to June 30.
The UK business opened seven new outlets during the year and increased total transactional value by
14.3 per cent, with similar growth expected this year.
Flight Centre warned there would be pressure on margins in most regions in the new financial year and said it would try to improve its fortunes through measures such as cutting overheads.
Chairman Graham Turner said volatility in the global travel market and pressure on air margins made it difficult to predict results for the new financial year.
Plans for the coming year included "modest" growth in store and staff numbers of around 15 per cent.
Flight Centre listed on the Australian Stock Exchange in December 1995.