The full-year performance of tour operator Tui Travel told a broadly similar story to that of rival Thomas Cook. Europe delivered strong numbers, which included underlying profit growth of 55 per cent in western Europe, 30 per cent in central Europe and 25 per cent in the Nordic regions. But the UK, which generates 31 per cent of underlying profits, was weak with an 11 per cent profit fall.
Significant uncertainty remains about the outlook for the UK travel market given the impact of government austerity measures in 2011. However, as with Thomas Cook, the early indications from winter and summer bookings are encouraging. The very short order visibility that tour operators have, though, means the market is unlikely to pin much hope on this yet.
The group continues to drive performance with savings and has reached an agreement with the employees of French airline Corsair, which should clear the way for management to turn that business around.
Broker Peel Hunt expects pre-tax profit of £356m for 1022, giving EPS of 22.9p (from £337m and 22p in 2010).
| TUI Travel (TT.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 228p | MARKET VALUE: | £2.5bn | |
| TOUCH: | 227-228p | 12-MONTH HIGH: | 314p | LOW: 189p |
| DIVIDEND YIELD: | 4.8% | PE RATIO: | NA | |
| NET ASSET VALUE: | 176p* | NET DEBT: | 13% | |
| Year to 30 Sep | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 12.8 | 18.0 | 14.4 | 8.40 |
| 2008 | 13.9 | -267 | 20.4 | 9.70 |
| 2009 | 13.4 | -94.0 | -4.80 | 10.7 |
| 2010 | 13.9 | -36.0 | -7.80 | 11.0 |
| % change | +4 | - | - | +3 |
Ex-div:01 Mar Payment:31 Jan *Includes intangible assets of £4.7bn or 417p per share | ||||
