Tui Travel has sunny outlook for 2014 as losses narrow
Tui travel has said it's upbeat about the coming year, as it saw loss before tax diminish 8.3 per cent to £166m in the last three months of 2013 from a year earlier.
Revenue increased slightly to £2.73bn from £2.72bn. Gross profit stood at £156m, up from £144m.
The owner of Thomson and First Choice said savings from restructuring its France business, which had dragged down performance, and growing momentum of its digital offering delivered “sustainable growth” over the quarter, with online bookings picking up.
Bookings for summer 2014 are up eight per cent, with total transaction value up by 45 per cent, driven by growth in Asia and Latin America and a rebound in Spain.
The big reduction in Tui's Egypt programme, political unrest in Thailand and a £2m hit from foreign exchange translation meant Tui managed to reduce underlying operating loss in its main sector by just £3m, to £83m. It added that the environment has become more competitive.
Its specialist and activity division, which operates sports-based holidays, saw “an improved performance”.
Chief executive Peter Long commented:
Our strategy is delivering sustainable growth, with a robust business model focused on growing unique holidays and online distribution. Overall, trading remains in line with our expectations and we are confident of delivering seven per cent to 10 per cent growth in underlying operating profit during the year.
Yesterday, JP Morgan reiterated Tui’s stock as overweight and, earlier in the week, Deutsche Bank raised its price target on shares from £3.60 to £3.95. JP Morgan’s target price is £4.80.