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TUI Travel PLC Confident Of 11% Growth In Profit

The share price of TUI Travel (LSE: TT) —  the international leisure travel company, which operates over 240 brands in 180 countries — is currently up just over 1%, following the release of a pre-close trading update this morning. The update is issued ahead of TUI’s preliminary results for the year to 30 September 2013, which will be published on 10 December.

TUI has increased its guidance on its  full-year underlying operating profit growth, which it now expects to exceed 11%. It reports strong summer high-season trading in both the UK and the Nordic regions, where revenues were up 8% and 10% respectively. TUI also says that  31% of its overall “mainstream” programme for winter 2013/14 has been sold, with year-on-year increases in the average selling prices across all its key source markets.

And whilst political unrest in Egypt and Syria has inevitably hit bookings, TUI says that it remains confident that the “flexibility and resilience” of its business model will enable it to more effectively absorb the adverse impacts of such geopolitical events.

Commenting on the results, chief executive Peter Long said:

We are very pleased with our trading during the Summer 2013 high season, with most of our programmes now almost fully sold. Our strong performance in the market continues to be driven by increased customer demand for unique holidays and higher levels of direct distribution.

 “As a result of this successful strategy, we are now confident of achieving full year underlying operating profit growth of at least 11% on a constant currency basis and are well positioned to continue to deliver on our five-year growth roadmap.

At the time of writing, TUI’s share price is 360.8p. That’s almost 28% up so far in 2013, and nearly 57% up on this time last year.

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> Jon doesn't own shares in TUI Travel.