Summer bookings are ahead of last year in all of TUI Travel's key markets, except for France, but the package tour operator remains cautious about the outcome for the full year.
The group reported an underlying operating loss of £317m in the six months to March 31st, a 3% change from the £307m loss in the corresponding period of the previous year, after a strong second quarter which saw a £13m year-on-year improvement.
Loss before tax at the interim stage was barely changed from a year ago at £367m versus a loss of £364m last year.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Revenue rose 5% to £5,447m from £5,207m the year before.
"The UK delivered a strong Winter performance which attests to our focus on differentiated and exclusive product and being online driven - key elements of our modern mainstream strategy. Our out-performance in this market is continuing into the Summer season and we will ensure that we continue to optimise our position," pledged Peter Long, Chief Executive of TUI Travel.
Winter programmesThe group said that its Winter 2011/12 programmes in all of its source markets closed out in line with expectations, with load factors ahead of the previous year.
Total sales in the Northern Region (UK and the Nordics) were flat, as a 3% increase in the average selling price compensated for a 3% decline in customer volumes.
In Central Europe (Germany, Austria, Switzerland and Poland), total sales were up 2%, even as customer numbers declined by 1%.
In Western Europe (France, Belgium and Netherlands), total sales were up 6% despite a 7% decline in France, with the average selling price up 1% and customer numbers up 5%.
Summer bookingsIn the UK, bookings since the travel firm's last statement have remained on a par with the year before, while bookings from France have been down 14% year-on-year.
Looking at cumulative bookings in the financial year up to April 29th, UK bookings are down 6%, the Nordics and Germany are up 3%, France is down 16%, Belgium is up 2% and the Netherlands are up 1%.
The group continues to encounter a later bookings curve in France, where holidays in Africa are popular, owing to challenging trading conditions. The prevailing economic conditions have reduced demand for the early part of the Summer season, though the group is beginning to see some return in demand for Tunisia and Morocco, particularly in the later part of the season. Trading for Egypt remains challenging.
Total sales for the summer programmes are up 3% in the Northern Region, up 4% in Central Europe and down 3% in Western Europe. The Accommodation & Destinations division's total sales are up 28%.
"In our online accommodation only businesses we continue to deliver healthy growth driven by new markets as well as increasing market share in more recently established markets," Long revealed.
The net debt position at March 31st was £1,184m, virtually unchanged from £1,182m a year earlier.
"Overall trading performance continues to be in line with the board's expectations," Long said.
Despite its cautious outlook, the board has recommended a 3% increase in the interim dividend to 3.4p.
Why you need a £1 million pension for a comfortable retirement
Feature Research suggests younger savers need to put more into their pension to account for inflation and housing costs ahead of retirement. We explain how to build a £1 million pension pot
By Marc Shoffman Published
Faulty coins worth up to £1,000 – do you own one?
A recent auction fetched £1,000 for a £2 coin with a ‘rare’ error on it. How can you spot these coins and how much could you get for them?
By Vaishali Varu Published