Tui losses narrow as it offloads Travelopia to private equity firm KKR for £325m
Travel firm Tui has agreed to sell its specialist holiday arm Travelopia to private equity firm KKR for an enterprise value of 381m euros (£325m).
It announced the sale ahead of its first-quarter results today, where UK holidaymakers' search for sun bolstered bookings, despite weakened demand for Turkey and Egypt after terror attacks and political uncertainty. Tui shares were up 4.15 per cent to 1,205p at the time of writing.
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Tui reported a slighter loss for the first quarter of 66.7m euros, a 17 per cent improvement on last year's 80.4m euro loss.
Its Northern region division, including Britain, Ireland, the Nordics, Russia and Canada, was bolstered by a "strong trading performance" in the UK and Ireland with volumes currently up more than 10 per cent year-on-year. The growth was driven by long-haul and cruise.
Turnover rose by 8.5 per cent to 3.49bn euros from 3.21bn euros. Bookings were up four per cent for the winter season compared to the same time last year.
Why it's interesting
Travelopia, Tui's division of luxury and adventure holiday brands spanning Sunsail, Jetsave and Hayes & Jarvis, was put up for sale in September last year, when Tui said it intended to focus on its core products. Travelopia has an expansive customer base of over 800,000 travellers each year and serves over 70 destinations worldwide through its 53 brands.
Its board approved the offloading of Travelopia in Hanover on Monday. The sale will result in a non-cash charge of around 133m euros, but won't have an impact on Tui's full-year guidance for underlying earnings before interest, tax and amortisation (Ebita) to rise by at least 10 per cent at constant currencies this year.
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What the company said
Fritz Joussen, chief executive of Tui, said:
The transformation of our business as an integrated tourism business based on own hotel and cruise brands, initiated in 2014, is really paying off. This has been demonstrated by the very good performance delivered in the completed financial year and has been confirmed in Q1 2016/17.
Of the Travelopia sale, Joussen said it marked "the next strategic step to further sharpen Tui's profile as a vertically integrated tourism business". He said the firm was "in an excellent state of health" and reiterated guidance of at least 10 per cent growth in underlying earnings.