26th Mar 2014 08:56
(An item published at 0819 GMT misstated the share price. The correct version follows.)
LONDON (Alliance News) - UK-based travel operator TUI Travel PLC Wednesday said it remains on track to deliver first half results broadly in line with last year, excluding Easter, and is still confident of growing its underlying operating profit by 7% to 10% in the full financial year.
In a trading update, Chief Executive Peter Long said the company was pleased with its performance during the winter trading season, with most of its programmes now almost fully sold, while trading of the summer season is so far in line with expectations.
Comparative periods for airlines and travel companies are often skewed by the timing of Easter, one of the key trading periods for the sector. Easter fell during TUI Travel's fiscal first half in 2013, but this year falls in its second half. Its financial year runs From October 1 to September 30.
TUI Travel said it had achieved higher average selling prices across most of its key markets for the winter programme. It added that bookings for this summer are so flat against tough comparatives figures for last year. Pricing is strong and it has so far sold about 45% of its programme, it added.
Demand is particularly strong in its UK and German markets, while its French operation is on track to reduce operating losses through restructuring and managing capacity, TUI Travel said.
It said it was continuing to see rising demand for its so-called unique holidays, which now account for 72% of its mainstream summer 2014 bookings, up 2% on the year. Online bookings are up 8%, it added.
"We are pleased with the development of Summer 2014 trading since our last update, despite strong comparatives. The UK and German businesses are driving a strong result and we are encouraged by the sustained improvement within our Specialist & Activity and French businesses. Our Accommodation Wholesaler business continues to achieve sustained double-digit growth," the company said in a statement.
TUI Travel made an underlying operating profit of GBP589 million in its last financial year to September 30, 2013, up from GBP490 million a year earlier. The underlying results exclude items like acquisition-related expenses, goodwill impairments and taxation of its joint ventures.
In the first half of last year, the company reported an underlying operating loss of GBP274 million on revenues of GBP5.4 billion. However, those figures include the Easter trading period.
Travel companies traditionally make losses over the winter period, making most of their money in the summer months when travel is much more active.
TUI Travel shares were up 0.9% at 444 pence early Wednesday, one of the top gainers on the FTSE 100. It had dropped back to trade up 0.4% at 441.7 pence at 0856 GMT.
By Steve McGrath; [email protected]; @SteveMcGrath1
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