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First look at new TUI

The newly enlarged TUI has released an inaugural set of financial results
May 14, 2015

Last July, Tui Travel finally agreed to a long-awaited merger with German parent company Tui AG. The two groups have merged various divisions in the past, but have now joined forces for good under the moniker TUI (TUI). The predominantly German group still has a number of key shareholders in London and is a constituent of the FTSE 100.

IC TIP: Hold at 1,249p

From now on, the group's bosses will evaluate the business in two parts: tourism and other. The tourism business includes hotels, resorts and cruises while 'other business' refers to hotel database company Hotelbeds and smaller, specialist operations. The enlarged group has put hotel booking website LateRooms up for sale, and the accountants consider the division to be discontinued.

These half-year figures illustrate a settling-in period for the two companies, although management claims operating losses are improving. In the six months to March underlying losses improved 14 per cent to €306m (£221). More importantly, approximately 59 per cent of Tui's summer programmes have been sold, with bookings up 2 per cent year on year and prices up 1 per cent. Trading in the UK and Benelux countries was stronger, with sales up 6 and 2 per cent respectively.

City analysts are reviewing their forecasts in light of the new business structure.

TUI GROUP (TUI)
ORD PRICE:1,249pMARKET VALUE:£7.33bn
TOUCH:1,249-1,250p12-MONTH HIGH:1,284pLOW: 1,055p
DIVIDEND YIELD:nilPE RATIO:2602
NET ASSET VALUE:221ȼ*NET DEBT:92%

Half-year to 31 MarTurnover (€bn)Pre-tax profit (€m)Earnings per share (ȼ)Dividend per share (ȼ)
20136.47-491-0.96nil
20146.94-475-0.48nil
% change+7---

*Includes intangible assets of €4.22bn, or 720ȼ a share

£1=€1.38