LONDON (Reuters) - European travel and tourism group TUI Group (L:TUIT) posted a 10.9 percent rise in annual earnings, just ahead of forecasts, and said next year would generate similar growth, after strong demand for its higher-margin hotel and cruise offerings.
TUI's earnings growth and positive outlook are the latest example of it outshining smaller British rival Thomas Cook (L:TCG), which last month posted an almost 20 percent fall in annual earnings and suspended its dividend.
For the 12 months ended Sept. 30, TUI reported core earnings (EBITA) of 1.147 billion euros (1.03 billion pounds) at constant currency, beating a consensus forecast of 1.145 billion euros, and up 10.9 percent compared to its forecast for growth of at least 10 percent.
For the current 2018-19 year, TUI said it would deliver underlying earnings of at least 10 percent in what it called a "challenging market", given tough airline competition, squeezed consumer spending and uncertainty from Brexit.
TUI said winter trading was just below last year's level, with bookings trailing by 1 percent.
In its last financial year, strong growth in TUI's cruises and hotels helped lift profits, mitigating the drag from airline disruption and hot summer weather in northern Europe, which made it harder to maximise profits from last-minute bookings.
"Our own holiday experiences content account for more than 70 per cent of our earnings: hotels, cruises, excursions and destination activities. This enables us to clearly differentiate ourselves from the competition," said CEO Fritz Joussen in a statement on Thursday.