Shares in TUI Group (LON:TUI) have jumped more than five percent in London in today’s session, as the tour operator unveiled that its losses had narrowed in the first quarter of its financial year. The company further reported a rise in revenues and said that current trading was progressing in line with expectations.
As of 10:25 GMT, TUI’s share price had added 5.61 percent to 1,684.00p, outperforming the benchmark FTSE 100 index which has slipped marginally into the red and is currently 0.1 percent worse off at 7,170.23 points. The group’s shares have added more than 45 percent to their value over the past year, as compared with about a 1.4-percent dip in the Footsie.
TUI posts Q1 results
TUI announced in a statement today that its operating loss adjusted for one-off effects had declined by €35.4 million to €24.9 million in the first quarter of its financial year. The company further delivered a nine-percent rise in turnover to €3.6 billion, partly on account of strong demand for its Holiday Experiences. The tour operator said that demand remained strong for the Western Mediterranean and Caribbean, despite hurricane disruption, and continued to improve for Turkey and North Africa.
The group further noted that its Summer 2018 had started well, with the programme 35 percent sold, in line with the prior-year, with revenues and bookings up eight percent and six percent, respectively.
TUI, however, recognised impact on its airline cost base, following the insolvencies of Air Berlin and Niki, while noting that it expected an improvement over time. The news comes after Saga (LON:SAGA), the cruises-to-insurance group for the over 50s, revealed in December that it had been impacted by the collapse of Monarch Airlines.
Analysts weigh in
“Shareholders are comforted by strong demand for holidays in the Northern and Central regions, summer already 35% sold (in-line) and continued improvement in destinations such as Turkey and North Africa,” Mike van Dulken, head of research at Accendo Markets, commented, as quoted by Proactive Investors, adding, however, that what was really driving the shares was “likely lower debt and improved underlying profitability […] leaving management comfortable enough – even at this early stage – reiterating FY growth guidance of underlying EBITA +10%, keeping it on track for a targeted doubling between FY14 and FY20”.