Tui share price rises ahead of merger with German parent
Tui Travel has reported a three per cent rise in pre-tax profits to £472m ahead of its merger with parent company Tui AG.
The travel company behind Thomson and First Choice posted operating profits of £612m, up four per cent on last year and an increase of 11 per cent to £654m on a constant currency basis.
Tui halved its French tour operator losses in a bid to break even by 2016, while the UK, Germany and the Netherlands performed strongly. However, the trading environment in Ukraine and Russia remained challenging due to geopolitical issues, the company said.
Chief executive Peter Long said the company’s “out-performance” demonstrates “the strength and resilience of our business model in what has been a competitive trading environment for many tour operators and airlines. The combination of our market leadership position, scale, focus on unique holidays distributed increasingly online and our relationship with the customer throughout their whole holiday experience continues to provide a strong basis for sustainable, profitable growth.”
On the merger with its German parent company which is due to be completed on 11 December, Long added: "The merger with Tui AG will strengthen and future-proof our combined group. It will also enhance the certainty of long-term unique holiday growth and reinforce our clear competitive advantage through further control over the end-to-end customer experience. This will mark the start of an exciting new phase of growth, delivering significant opportunities and value to customers, employees and shareholders."
For the winter holiday season, the firm said 63 per cent of its holidays were sold so far, with a price one percent higher than last year. In the UK, bookings were up four percent with 53 per cent of winter holidays sold and 22 per cent of summer 2015 sold.