The shares of Tui Travel (LSE: TT) slipped 4% to 384p this morning after the world’s largest tour operator announced third-quarter results, despite being slightly above the market’s expectations.
Tui, best known for its Thomson and First Choice package holiday brands, reported an 18% improvement in underlying profits compared to last year. Tui’s third-quarter revenues grew by 5% to £3.8bn, while UK booking volumes improved by 4%, better than the industry average. This growth was complimented by a 14% boost in unique holiday bookings, as holiday-makers sought to escape the unpredictable British weather.
In France, however, challenging trading conditions saw bookings plunge by 22%, as Tui scaled back its capacity by 19%.
Looking ahead, the company confirmed it had now sold 84% of its 2013 summer holiday packages, and had enjoyed an encouraging start to winter bookings.
Tui chief executive Peter Long remarked:
“Our proven strategy continues to accelerate us towards a complete Modern Mainstream offering through the sustained growth of unique holidays and direct distribution. Given our current position we remain very confident of achieving full year underlying operating profit growth of at least 10% on a constant currency basis and are well positioned to continue to deliver our five year growth roadmap.”
With a market cap of £4.2bn, Tui Travel is valued at 14 times its forward earnings, and offers a prospective dividend yield of 3.3%.
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> Mark does not own any share mentioned in this article.