Tui records 37% hike in profits despite 'geopolitical challenges'

Tui records 37% hike in profits despite 'geopolitical challenges'

Tui Group today shrugged off 'geopolitical challenges' and the terrorist massacre of tourists in Tunisia in June to report a 37% hike in annual pre-tax profits to €885 million.

Turnover at the Thomson and First Choice parent was up by 8% to more than €20 billion in the year to September 30.

Europe’s largest travel group expects to deliver at least 10% growth in underlying earnings [EBIDTA] over the next three years to 2017-18. This follows last year’s the merger between Tui Travel in the UK and Tui AG in Germany.

The company reported a 13% rise in earnings from its tourism business in the past 12 months with a “particularly strong performance” from its northern region – which includes the UK - hotels and resorts and cruises.

The UK delivered a strong trading performance with 5% increase in customers, in spite of the tragic events in Tunisia at the end of June.

Overall long-haul holidaymakers grew by 8% in the year while controlled distribution increased by two percentage points to 20%. Online distribution grew by three percentage points to 41%.

A strategic review of Hotelbeds is under way, including a potential disposal of the business following the sale of LateRooms, Tui confirmed.

The group described current trading as being in line with expectations, taking into account the continued suspension of flights in and out of Sharm el Sheikh by several countries.

The winter 2015/16 programme is 60% sold with average selling prices up 4%. Overall long-haul bookings are up 9% and the UK is delivering good growth in total bookings, up 4%.

Summer 2016 trading from the UK has got off to a good start with bookings up 11%.

The company reiterated plans to expand the Tui masterbrand to Belgium, the Nordics region and the UK “over the next few years” after its introduction in Holland and France.

Tui added that the planned expansion of its fleet of ships in Germany and the UK would “enable us to become one of Europe's leading cruise companies”. Thomson Cruises in the UK will see its ships modernised plus the addition of two vessels from Tui Cruises in Germany - Mein Schiff 1 and 2.

Group joint chief executives, Friedrich Joussen and Peter Long, said: "We are pleased to announce a strong set of results in the first year following the merger.

“We have outperformed our earnings guidance, delivering 15.4% growth in underlying EBITA in the full year.

“This was driven by a particularly good performance in northern region, hotels and resorts and cruises, despite the tragic events in Tunisia and other geopolitical challenges earlier in the year.

“This demonstrates the resilience of our integrated business model. The integration of our two businesses is on track and already delivering results.

“Taking into account the continued cessation of flights in and out of Sharm el-Sheikh by several countries, current trading for winter 2015/16 and summer 2016 is in line with our expectations.”

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