Tui confident on 2010 after loss narrows
TUI Travel, Europe’s largest tourism operator, said it was on track to meet expectations for 2010 after revealing a second half pre-tax loss of £52m.
The figure contrasted with a £267m loss last year, reflecting the positive effects of capacity cuts and price increases. Analysts greeted the news with cautious optimism.
Revenue at Tui stayed flat at £13.9bn, while underlying pre-tax profits rose by 15 per cent to £366m. Chief executive Peter Long said winter bookings for UK holidays were down four per cent, an improvement on their cumulative slide, while the company expected capacity to remain steady next summer.
Long added: “Our customers’ behaviour has demonstrated that, even against a backdrop of reduced consumer confidence, the main summer holiday is an essential expenditure.”
Tui notched up £120m cost benefits from 11 small acquisitions, expected to taper off to £60m in 2010 and £20m in 2011.
Sam Hart, analyst at Charles Stanley, said: “Analysts are going to be concerned that the company can deliver after these merger-related savings fade out.”
Mark Brumby at stockbroker Astaire added that 2010 “could be difficult”, citing limited visibility and rising unemployment as headwinds.
Tui’s shares closed one per cent down at 243.30p. The company paid a final dividend of 7.7p per share.