Tui Travel stock drops in spite of upbeat forecast

 
Kasmira Jefford
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TUI Travel, the world’s largest tour operator, saw shares slump yesterday, despite the group reporting it was “very confident” of growing profits by at least 10 per cent this financial year.

Investec analyst James Hollins attributed the fall to profit taking, adding that Tui did not provide “the upgrades that some were looking for”.

The owner of Thomson and First Choice said that UK summer holiday bookings were up four per cent, with average selling prices seven per cent ahead, despite concerns that the July heatwave may have deterred people from going away.

However, total bookings were down two per cent, hit by weakness in Germany and France, which fell five and 22 per cent respectively.

The company has cut the number of holidays on offer, particularly to North African destinations like Tunisia and Egypt due to political unrest.

Operating profit improved by £13m to £87m in the third quarter of the year compared to the same period last year, although this excludes the costs of aircraft returning empty from the beginning and end of each season.

Tui said 84 per cent of its summer holidays were already sold, helped by strong demand for all-inclusive package holidays, and that it had also made “an encouraging start” to the 2013/14 winter season, with 21 per cent of the programme already sold.