Profits took flight at Tui (TUI) in the travel group's first year as a combined Anglo-German operation, rising 15 per cent to €1.07bn (£0.77bn) at the underlying operating level. This is all the more impressive given the major terrorist attack at one of Tui's resorts near Sousse in Tunisia, which chief executive Peter Long at the time described as the worst atrocity of his 30-year career. Traders responded by sending the shares up nearly 5 per cent on results day.
Operating profits rose 13 per cent (at constant currencies) within the hotel division, even though the terrorist incident cost €26m in direct expenses and a further €17m in provisions against prepayments for accommodation. Thirty of the 38 individuals killed in the Tunisia attack were Brits, but the incident had a greater impact on Tui's French customers, for whom North Africa is a more typical holiday destination. The British hunger for sun still showed through with a 5 per cent increase in customers from the country.
It has been a year since the merger of Tui Travel and Hanover-based Tui AG, but management still has large ambitions for integrating the businesses. It is targeting €50m in operating efficiencies by the year to September 2017; only a fifth of the savings have already been found. The combined group's five airlines will also "act as one", maintaining local differences only where beneficial. Tui is the only leisure airline to operate the Boeing 787 Dreamliner - an attraction it wants to leverage for long-haul flights.
Accommodation will be key to the group's growth ambitions. Management has plans for 60 new hotels by FY 2019, having singled out three core brands - RIU, Robinson and Magic Life - for expansion and launched a new premium all-inclusive hotel brand, TUI Blue. The company will also try to "internationalise" its Sensatori, Sensimar and Family Life resort concepts.
Bloomberg consensus data suggest adjusted EPS of 113¢ for the year ending 30 September 2016, compared to 98¢ in FY2015.
| TUI GROUP (TUI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,187p | MARKET VALUE: | £7.0 bn | |
| TOUCH: | 1,187p-1,188p | 12-MONTH HIGH: | 1,287p | LOW: 997p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 26 | |
| NET ASSET VALUE: | 326¢* | NET DEBT: | 9% | |
| Year to 30 Sep | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2014** | 18.5 | 499 | 26 | 33 |
| 2015 | 20.0 | 535 | 64 | 56 |
| % change | +8 | +7 | +146 | +70 |
Ex-div: 8 Feb Payment: 10 Feb £1=€1.38 *Includes intangible assets of €4.1bn or 704¢ a share **Pro-forma figures reflecting the merger of Tui and Tui AG in December 2014 | ||||
