The grounding of the Boeing 737 Max took a significant chunk out of package holiday company and airline Tui’s (TUI) 2019 cash profits, and the regulatory issues could continue well into next year. Its underlying cash profits for the 12 months to 30 September came down a quarter to €893m (£756m) because the Boeing model was pulled from service. If Boeing doesn’t get the plane back in service by April 2020 and the uncertainty continues to September 2020, Tui said the hit to next year’s cash profits would go from €130m to between €220m and €270m.
Upside in the period included the Thomas Cook collapse, which saw “an unprecedented number of customers in the UK migrating to Tui to fulfill their holidays”. Last week, the Civil Aviation Authority said it had refunded 60 per cent of Thomas Cook customers’ claims from the September collapse.
Tui highlighted its cruises division as a driver of 2019 earnings, with underlying cash profits up in the division by 13 per cent year-on-year at constant currency to €367m. Three new ships were launched in the period.
Bloomberg consensus estimates have revenue climbing 2.5 per cent to €19.4bn for the September 2020 year-end, while cash profits are forecast to fall 3 per cent to €1.3bn.
| TUI (TUI) | ||||
| ORD PRICE: | 946p | MARKET VALUE: | £5.57bn | |
| TOUCH: | 946-947p | 12-MONTH HIGH: | 1,230p | LOW: 687p |
| DIVIDEND YIELD: | 4.8% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 586¢* | NET DEBT: | 22% | |
| Year to 30 Sept | Turnover (€bn) | Pre-tax profit (€bn) | Earnings per share (¢) | Dividend per share (¢) |
| 2015 | 20.0 | 0.54 | 64 | 56 |
| 2016 | 17.2 | 0.62 | 61 | 63 |
| 2017 | 18.5 | 1.08 | 136 | 65 |
| 2018 | 18.5 | 0.97 | 117 | 72 |
| 2019 | 18.9 | 0.69 | 71 | 54 |
| % change | +2 | -29 | -40 | -25 |
| Ex-div: | 10 Feb | |||
| Payment: | 14 Feb | |||
| £1=€1.18, *Includes intangibles of €3.7bn, or 628¢ per share. NB: Net debt will increase by appr. €2.3bn on recognition of lease liabilities under IFRS 16. | ||||
