Tui profit jumps but growth set to slow
Europe’s largest tour operator Tui said its profit jumped by over a third in its last financial year but warned that growth would begin to slow over the next 12 months.
Underlying earnings before interest and taxation (EBIT) rose 33 per cent to €1.3bn, up from last year’s €977m, as more than 20m customers travelled with the package holiday provider.
Revenue climbed 12 per cent to €23.2bn.
Sebastian Ebel, Tui’s chief executive, hailed a “very good year” for the firm and said the company was “well positioned” for the future.
However, shares in the firm initially fell over five per cent in early trading amid slower growth forecasts for the coming year. They later gained back ground to 2.22 per cent by 4pm GMT.
Guidance for the full-year currently sits at 5-10 per cent for revenue growth, and 7-10 per cent for underlying EBIT.
The group, which ditched its London listing in favour of Frankfurt earlier this year, also noted an increase in prices across the year, while prices for winter and next summer are expected to rise five per cent and three per cent respectively.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: “Consumers continue to prioritise travel, meaning more customers have been willing to pay higher prices to enjoy a break away from everyday life.”
Chiekrie noted Tui’s wide-ranging buisness, which includes an airline, cruise ships, hotels and resorts, made it more defensible to wider trends.
He added: “The drains on cash when you have planes, huge hotels and cruise ships to maintain and fill are enormous, so it was good to see occupancy rates across the business creep higher. Fewer empty rooms mean more efficiencies and higher profits,”