Tui Group remains on course for 10% earnings growth

Tui Group remains on course for 10% earnings growth

Tui Group remains on course to achieve 10% earnings growth this year with the help of increased demand across most destinations over the summer.

The Thomson and First Choice parent highlighted growth in the number of bookings across all source markets for Greece, Bulgaria, Croatia, Italy, Cape Verde and long haul.

The proportion of direct bookings rose by 4% and online by 7% over the same period last year together with increases in sales of own brand hotels and cruises.

UK summer revenue was up by 7% year-on-year despite customer numbers being pegged at 2016 levels.

The company, which has started rebranding under the Tui name in the UK, reported a 2% rise in UK winter 2017-18 revenue with holidaymaker numbers down by 7% on a programme which is currently 37% sold or 39% when including Thomson Cruises.

The summer 2018 programme from the UK is 10% sold with revenue up by 2% and bookings down 3%, described as being in line with expectations following a strong prior year when bookings were up by 7%.

“As previously stated, volumes in the UK have remained in line with last year’s strong performance, despite the impact of the weaker sterling on accommodation costs,” the group said in a pre-close period trading statement today.

“During the recent hurricanes, which affected our operations in the Caribbean and Florida, our primary focus has been on supporting customers staying in these areas and assisting with rebooking to alternative destinations where necessary.

“Despite this impact, we have reiterated our guidance of at least 10% growth in underlying EBITA [earnings] for the current financial year, demonstrating the resilience of our business model and our ability to deal with such external unforeseen events.”

Tui added: “Trading for future seasons, albeit at an early stage, is also overall in line with our expectations.

“Whilst there are external factors which can impact specific parts of the business, we are confident that our balanced portfolio, content led growth strategy and integrated model leave us well positioned to continue to deliver against our plans.”

The group plans to provide an update on its strategy to combine its hotel, cruise and tour operating businesses in December.

Tui Group chief executive Friedrich Joussen said: “As we near the end of the third financial year post merger, our results and trading performance show that we are consistently delivering our growth strategy.

“Our hotel and cruise brands continue to perform very well, having further expanded their unique offering this year; and the growth in source market customers demonstrates the strong appeal of our holidays and distribution capability.

“At this early stage, overall trading for future seasons remains in line with our expectations.”

He added: “Whilst there are at times external factors which can create uncertainty in specific markets and destinations, we are confident that our balanced portfolio, content led growth strategy and integrated model leave us well positioned to continue to deliver against our plans.

“We are therefore pleased to reiterate our guidance of at least 10% growth in underlying EBITA for the financial year 2016/17, and look forward to providing an update on our strategy this December.”

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