TUI Travel PLC (LON: TT) reveals strong trading and improved margins.
The shares of TUI Travel (LSE: TT) climbed 12p, or 4%, to 323p during early London trade this morning after the travel agent said current-year profit growth could approach 10%.
TUI, whose brands include Thomson and First Choice, confirmed profits could advance towards the top end of its earlier expectations during the twelve months to September 2013.
The optimistic prediction from the FTSE 100 member accompanied a first-half update that revealed mainstream winter sales up 2% alongside improved margins.
TUI said the "very strong trading momentum" had continued with summer bookings, with mainstream summer holiday sales up 7%.
Peter Long, the chief executive of TUI, said:
"We have a clear roadmap for growth built upon a deep understanding of our industry and customers. Our strong operational performance over winter means we will deliver reduced winter losses."
"This very strong trading has continued into Summer 2013, leaving us well placed to achieve a full-year performance towards the upper end of our growth targets."
Assuming TUI's profits grow at 10% and the advance is reflected at the underlying post-tax level, near-term earnings could be 28p per share.
That projection would place TUI's shares on a P/E of less than 12.
Meanwhile, TUI's trailing 11.7p per share dividend currently supports a 3.6% income.
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> Maynard does not own any share mentioned in this article.