Investors in the European travel industry can usually get a half-decent steer on how the holiday season is shaping up by early spring, so the latest data from trade body Airports Council International showing global passenger numbers regaining momentum after a slow start to 2018 will not have gone unnoticed. There are signs that positive momentum is returning to Tui (TUI), too. Half-year figures for the travel heavyweight revealed an adjusted operating loss of €159m (£139m), a sizeable reduction from the €230m loss reported at the same point in 2017. Leaving aside the vagaries of foreign-exchange translations, returns for the 2018 half-year were helped by an earlier Easter and a €38m gain on the disposal of three Riu hotels, offset by costs incurred in the wake of the insolvency of the Niki airline.
Given the pronounced second-half weighting, it’s hard to make a definitive call on how the year will pan out, but revenues were up over the 2017-18 winter season, and management reports that summer bookings are progressing well within the sales and marketing division, with 59 per cent of the programme sold, in line with the strong comparator recorded in 2017.
The group has seen renewed demand for destinations in Turkey and North Africa; a welcome development in view of the terrorist incidents and political upheaval that discouraged travellers over the past couple of years. Sun-drenched Spain remains the number one destination by customer volume, but not everyone has opted for Mediterranean resorts, evidenced by increased demand for holidays and cruises to central and northern Europe. In response to the latter dynamic, the group has expanded its seaborne capacity, while approval has been granted for a third new-build expedition cruiseship for Hapag-Lloyd Cruises.
Panmure Gordon gives adjusted profits of €1.1bn for the September 2018 year-end, leading to EPS of €1.30, against €983m and €1.10 in 2017.
| TUI (TUI) | ||||
| ORD PRICE: | 1,742p | MARKET VALUE: | £10.2bn | |
| TOUCH: | 1,741-1,744p | 12-MONTH HIGH: | 1,753p | LOW: 1,098p |
| DIVIDEND YIELD: | 3.3% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 397¢* | NET DEBT: | 19% | |
| Half-year to 31 Mar | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
| 2017 | 6.35 | -311 | -51.0 | nil |
| 2018 | 6.81 | -247 | -46.0 | nil |
| % change | +7 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| £1=€1.14 *Includes intangible assets of €3.43bn, or 584¢ a share | ||||
