TUI shares are in demand this morning after the group reported a very respectable set of full-year figures. Revenue rose by 6.3% and underlying earnings ticked up by 10.9% - topping forecasts.
The group issued an upbeat outlook as underlying earnings are expected to increase by 10%. The current winter trading nearly matches last year’s level. The hotel & resorts, and cruises divisions continue to perform well. The dividend was upped from 65 cents to 72 cents and this is a clear indication they are confident in their future earnings ability. Given what has gone on in the travel sector lately, it was an impressive performance from TUI.
Tui (LON:TUIT) had a disappointing third-quarter as earnings dropped by 18%. Revenue at the hotels & resort and the cruises grew by 6.4% and 6.1% respectively. These areas of the business are enjoy higher profit margins so it is encouraging to see solid single digit growth in sales.
The travel sector across the board has had a difficult time as the unusually warm weather encouraged prospective holiday makers to stay at home. Why would Britons go to Continental Europe, when the Continental weather come to us this year?
Thomas Cook (LON:TCG) and Ryanair (LON:RYA) both issued profit warnings and Flybe (LON:FLYB) have put themselves up for sale – so the sector is clearly under pressure.
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