TUI says winter trading off to a good start

Package tour operator TUI Travel has said that the winter 2012/13 season has got off to a 'very encouraging' start, though trading in France remains challenging.

The company reported revenue of £14.46bn in the year to September 30th, down 2.0% from £14.69bn the year before, as organic growth of 2.0% was offset by a foreign currency translation impact of -4.0%.

Pre-tax profit rose 8.0% from £360m to £390m, helped by record Mainstream underlying operating profits (on a constant currency basis) in all markets with the exception of France and Southern Europe. Growth was also supplemented by £42m cost savings through the business improvement programme.

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However, TUI's French operation reported an underlying operating loss of £47m, compared with a loss of £53m last year. The company reduced capacity by 34% in the region, with sizeable reductions in loss-making capacity to Egypt and a number of long-haul destinations.

"The year has been one of many successes. We have delivered record group profits while the UK achieved outstanding results both in terms of profit and margin all against a backdrop of continued economic uncertainty," said Chief Executive Peter Long.

TUI raised its final dividend per share (DPS) from 8.0p to 8.3p, which, when added with the interim DPS of 3.4p (3.3p last year), brings the full-year DPS to 11.7p, up 4% on last year's 11.3 payout.

Net debt by the end of the period was £108m, compared with a net cash position of £4.0m at the end of September 2011, due to advances under finance leases for three aircraft totalling £83m and an FX retranslation effect of £70m of net debt balances in the Eurozone.

Current trading

Long added: "Overall, with the exception of France, trading for both Winter 2012/13 and Summer 2013 is very encouraging."

Total Mainstream sales in the winter 2012/13 season are up 3.0% year-on-year, though customers numbers are down 1.0%.

The company detailed its new 'roadmap for growth' in which it said that it has the ability to delivery an underlying operating profit compound annual growth rate of 7-10% over the next five years.