News: UPDATE 1-Australia's Flight Centre says profit may fall, shares tumble

• 2016 FY pre-tax profit likely 2-5 pct down on 2015
• Previous guidance up 4-8 pct
• Blames Brexit, price war, Zika

(Adds CEO quote, additional concerns)

SYDNEY, May 23 (Reuters) - Australian travel agent Flight Travel Group Ltd (FLT) said on Monday that annual pre-tax profit may fall up to 5 percent in fiscal 2016 because of geopolitical concerns, an airfare price war and spending on "key improvement strategies".

The new forecast compared with previous guidance of a pre-tax profit increase of up to 8 percent.

Flight Centre shares fell 7 percent in Sydney afternoon trading.

"While we will be disappointed to miss the short term profit target we set in August last year, we are investing significantly in our future and in the strategies that will underpin our longer term growth," Managing Director Graham Turner said in a statement to the Australian Securities Exchange.

Discounted fares around the world are stimulating ticket sales but are hitting earnings margins, the company added.

It said profit in the six months to end-June was being affected by a dip in business confidence due to Australia's July 2 election and Britain's referendum next month on whether to stay in the European Union.

Fear of the zika virus is meanwhile affecting travel to some normally popular holiday destinations, it said.