6th Feb 2014 09:19
LONDON (Alliance News) - Travel operator TUI Travel PLC Thursday reported flat revenues for the first quarter of its new financial year, but managed to reduce its operating losses, with the help of strong demand for its unique-holidays range.
The leisure travel company, owner of Thomson and First Choice, said it reduced its underlying operating losses by 6.9% to GBP108 million for the first quarter to end of December 2013, compared with GBP116 million a year earlier. On a statutory basis it reported an operating loss for the period of GBP134 million, down from GBP149 million.
"Our reduction in losses was driven by a reduction in losses in our French business, the cost reduction programme, strong trading in accommodation wholesale division and an improved specialist & activity division," Chief Executive Peter Long told journalists in a call after the results were released.
TUI Travel said the trends from the previous financial year carried on into the new year, with regions such as the UK, Germany and the Nordics driving growth, and strong demand for its unique holidays, which are holidays available exclusively via TUI.
"Selling prices are up, because customers are booking a greater proportion of all-inclusive holidays with us. We are getting a great share of their holiday spend, so it is a win-win," said Long.
TUI said current trading is strong, with a strong performance in the key January booking period.
It said the Winter 2013/14 season is closing out in line with expectations, having sold 85% of the programme, and reporting higher average selling prices in most markets. The group said its Accommodation Wholesaler division continued to be driven by driven by Asia and Latin America, with total transaction value up 21% for the Winter 2013/14 programme.
It said that unique holidays accounted for 71% of all mainstream bookings, up three percentage points compared with this time last year, whilst online sales continue to grow, accounting for 39% of winter holidays booked.
TUI said Summer trading in the key January booking period was strong, with mainstream booking volumes up 1%, and average selling prices up 3%. It said mainstream online bookings are up 8%. It said its Accommodation Wholesaler business also had a strong start to the year, with total transaction value for summer 2014 up by 45%, again driven by Asia, Latin America and a rebound in Spain.
"Within this, UK online bookings increased 12% during the key January booking period, with traffic to our newly optimised mobile and tablet websites up be 45%," the company said.
The group said it has currently sold around 33% of the overall mainstream summer programme, in line with this time last year.
TUI said revenue for the group was flat in the first quarter, reporting revenues of GBP2.73 billion, compared with GBP2.72 billion the prior year.
The group gave a fairly cautious outlook for trading for the remainder of the first half, saying it expects to deliver a trading result for the first half of the year broadly in line with last year, excluding the timing of Easter, which this year falls in the second half of TUI's financial year.
Nevertheless, TUI Travel said its still confident of achieving full year underlying operating profit growth of between 7% and 10%.
"We have had to remix the programme, and therefore we are reaffirming our confidence. In the current trading environment we are pleased with where we are, and we are on track to be where we want to be," said Long.
TUI had to reshape its programme in selected markets last year, including the loss-making long-haul programme of its troubled French business, and it reduced its Egypt programme to increase capacity elsewhere, after it was hit by the unrest in the region. It said it has begun to see improving sales for the region.
"We are pleased Egypt is reopen for business, and we are seeing a recovery, albeit fairly slow but it is building. We believe it will continue as we head into the summer months, and going into winter. We remain cautiously optimistic," Long told journalists.
TUI's French business reported a decrease in operating loss, driven by a significant reduction in capacity on loss-making routes and efficiency savings. The group said it remains on target to reduce losses significantly in the French tour operator this year.
Shares in TUI Travel were down 2.3% at 414.60 pence per share in early trading Thursday morning.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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