Tui's resilient summer performance keeps earnings growth on track despite hurricane impact

 
Rebecca Smith
Tui said customer volumes were boosted for the likes of Greece, Bulgaria, Cape Verde and Croatia
Tui said customer volumes were boosted for the likes of Greece, Bulgaria, Cape Verde and Croatia (Source: Tui)

Travel and tourism firm Tui Group had a sunny update for investors this morning, reiterating guidance for at least 10 per cent growth in underlying earnings for the financial year.

That was despite the firm noting the impact of recent hurricanes in the Caribbean and Florida, which had affected demand.

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The figures

The company said trading since its last update remained in line with expectations, with high occupancy rates at hotels and resorts across most of its destinations.

It has though noted an impact from the recent hurricanes which affected operations across the Caribbean and Florida, with Tui saying its focus had been "supporting customers staying in these areas and assisting with rebooking to alternative destinations where necessary".

In spite of that impact, the company has reiterated guidance of at least 10 per cent growth in underlying earnings before interest, tax and amortisation for the current finance year.

There was growth for a wave of destinations over the summer, including Greece, Croatia, Italy and Cape Verde.

Why it's interesting

The impact of the likes of Hurricane Irma and Harvey were felt by the company, which said demand in winter bookings had dipped for parts of the Caribbean and Florida, but Tui said its unchanged guidance reflected "the resilience" of its business model, and ability to deal with external unforeseen events

It has also weathered the impact of the slump in sterling on accommodation costs, with Tui saying volumes in the UK have remained in line with last year's performance.

Further ahead, Tui expressed caution as it was an early stage, but said at present, it's still in line with expectations too. It flagged "good growth" in bookings for Cape Verde, Cyprus, North Africa and Thailand.

The firm will release its annual report in December.

What the company said

Chief executive of TUI Group Friedrich Joussen said: "At this early stage, overall trading for future seasons remains in line with our expectations. Whilst there are at times external factors which can create uncertainty in specific markets and destinations, we are confident that our balanced portfolio, content led growth strategy and integrated model leave us well positioned to continue to deliver against our plans."

We are therefore pleased to reiterate our guidance of at least 10 per cent growth in underlying Ebita for the financial year 2016/17, and look forward to providing an update on our strategy this December.

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