TUI reports record profit
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TUI Travel has seen a 20% increase in underlying operating profit, reaching GBP589 million for the year up to 30 September 2013.
The preliminary numbers released today are up from the GBP490m posted last year, exceeding the company’s own targets.
In the UK its underlying operating profits were up 27% year-on-year to GBP251m, while its German business posted a 30% increase to GBP113m.
Around 47% of its UK bookings are now online, with 83% of its UK departures now to its ‘unique concepts’ which include the Couples, Splash and Sensatori hotels.
Its accommodation wholesale businesses Hotelbeds and bedsonline has also seen growth of 23% to GBP1.65bn thanks to growth in Asia and Latin America.
Its free cash flow has now improved GBP112m to GBP427m, with its net cash position at GBP2m compared to a net debt of GBP142m in 2012.
A change in back office and IT systems helped the group to save GBP46m, although was set back by the weakness in its France tour operator and Specialist & Activity arm.
Sixty percent of TUI’s winter holidays are currently sold, with the company ‘pleased’ with its summer 2014 trading that is currently 13% sold and expected to see the same numbers as summer 2013.
“The year has been outstanding and highlights that our strategy of delivering unique holidays sold directly to our customers is the right one. We have once again reported record underlying profits across the business, significantly exceeding the top end of our growth roadmap target of 10%. This follows strong margins across the peak summer period, particularly in the UK and accelerated business improvement delivery,” said Peter Long, chief executive at TUI Travel.
“TUI Travel is structurally well positioned with a robust business model that gives us a long term competitive advantage. The business continues to deliver sustainable growth through our unique holiday experiences, increasingly distributed online, whilst leveraging its scale as one organisation. This in turn, will drive further value for both our customers and shareholders. Building on this year’s outperformance where we have achieved a 13% underlying operating profit growth, I remain confident that we will deliver consistently on our five year annualised growth target of between 7% to 10% at constant currency.”
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