TUI Travel Earnings Gain as Germans Take Post-World Cup HolidaysKari Lundgren
TUI Travel Plc said full-year earnings will reach the upper end of its forecast after sales of package holidays in Germany jumped after that country’s victory in the soccer World Cup.
Full-year operating profit excluding acquisition-related costs and other items increased by at least 9 percent in the year ending September, within the previously forecast range of 7 to 10 percent, the Crawley, England-based company said in a statement today. German bookings and profit margin were both ahead of last year, it said.
“We had a very strong late booking market with more people taking inclusive holidays,” Chief Executive Officer Peter Long said in an interview with Bloomberg TV. Sales of package holidays grew 22 percent year-on-year, he said.
The travel company is seeking to gain investor approval for an all-share merger with parent TUI AG. The combined entity, valued at about 6.5 billion euros ($8.2 billion), will realize 100 million euros via tax savings and the elimination of overlapping functions and separate stock exchange listings, while more hotels and higher occupancy rates will further increasing earnings.
Shareholders are “very positive” about the merger plans, Long said. At least 75 percent of TUI Travel shareholders must be in favor of the deal.
TUI Travel gained as much as 3 percent and traded 0.6 percent higher at 384.8 pence as of 9:41 a.m. in London.
Bookings for the coming winter are up 2 percent, with 38 percent of the seasonal packages sold, the company said. The addition of Boeing Co. 787s has driven demand for long-haul leisure destinations such as Jamaica and Mexico out of the U.K.
The new company will be listed on the London Stock Exchange, with a secondary quotation in Germany, removing the biggest obstacle in TUI AG’s corporate structure 1 1/2 years since Friedrich Joussen took the helm. The executive, who restored the ability to pay dividends after investors were left empty-handed for years, plans to create the world’s largest tourism business and run it with Long until taking sole leadership in 2016.