LONDON/BERLIN (Reuters) - TUI Group (L:TUIT), the world's largest leisure and tourism group, expects profit growth over the next three years to exceed 10 percent annually, as the merger that created it six months ago bears fruit.
In its first strategy update since it was formed from the combination of London-listed TUI Travel and German majority- owner TUI AG (DE:TUIGn), TUI said on Wednesday it was also confident of meeting this year's target of growing profit by up to 15 percent.
A series of moves to simplify its structure and reorganise, including the announcement that it would put British hotel booking website LateRooms up for sale, showed that plans for the enlarged company were progressing, it added.
"Our post-merger integration process is ahead of our original plan. Our growth phase is gaining momentum," joint chief executives Fritz Joussen and Peter Long said in a statement.
Shares in TUI traded up 2 percent to 1,277 pence, close to an all-time high reached earlier in May.
For its second quarter, the group reported a narrower underlying loss before interest, tax and amortisation (EBITA) of 167.8 million euros (120 million pounds), against a loss of 201.6 million one year ago, helped by a strong performance in its cruise ship business.
That, combined with pleasing summer trading, gave it confidence it would meet its target of delivering underlying operating profit growth of 10 to 15 percent on a constant currency basis for the year ended in September.
Over the coming three years, TUI forecast underlying EBITA would grow by at least 10 percent annually, which analysts at Citi said was ahead of their 7 percent assumption.
Signalling its confidence in its cruise and long-haul holiday businesses, TUI also said it would order two new cruise ships to cater to German demand and acquire two further Boeing (NYSE:BA) Dreamliner jets.
TUI, which competes against Thomas Cook (L:TCG) in the European holiday market, said it would put the British part of LateRooms on the block, with a sale expected in the current financial year. It said it would close down the Asian part of the website.
The disposal plan followed its announcement on Tuesday that it would simplify group structure by combining its tour operating, hotel and cruise ship businesses into one unit, and that its deputy chief executive Johan Lundgren would be leaving.