TUI Travel share price: British tour operator releases full-year results

on Dec 4, 2014
Updated: Oct 21, 2019
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iNVEZZ.com, Thursday, December 4: British tour operator TUI Travel (LON:TT) today released its preliminary results for the year ended 30 September 2014.

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**Highlights from the company’s statement:**
• Growth roadmap exceeded: 11% increase in underlying operating profit at constant currency2

– Underlying operating profit increased by 11% to £654m on a constant currency basis2. Underlying operating profit increased to £612m (2013: £589m).

– Significant increase in statutory operating profit to £499m (2013: improvement in underlying operating profit, lower impairment charges and lower separately disclosed items.

• Mainstream strategy continues to deliver sustainable, profitable growth

– Mainstream underlying operating profit up 13% on a constant currency basis2 to £581m (2013: £514m). Driven by strong performances in the UK, Germany and Netherlands and a halving of French tour operator losses.

– Underlying operating profit margin increase of 40bp in the UK (6.9%) and 30bp in Germany (3%), on a constant currency basis2.

– Nordics suffered from a challenging H1 performance but results have since stabilised. A change of management in H2 and implementation of our “One Nordic” structure leaves us well positioned for growth.

– The trading environment in Russia and Ukraine continues to be challenging due to geopolitical issues.

– Unique holiday mix now 71%. Directly distributed holidays are 68% of Mainstream holidays, with online sales at 38%.

– Record customer satisfaction level of 79% maintained across our key markets.

– One Mainstream model firmly in place, delivering a more effective and streamlined operation.

– Our customers continue to experience the benefits of our digital transformation strategy.

• Leveraging our global leadership position in Accommodation Wholesaler

– TTV growth of 15% driven by Asia and Latin America.

– Strong underlying operating profit growth of 21% at constant currency2, exceeds roadmap target.

• Delivering increased shareholder value

– Free cash flow increases 12% to £477m on a constant currency2 basis. The available net cash5 position of £371m (2013: £2m) provides further balance sheet strength.

– Our £350m October 2014 convertible bond saw 99.6% conversion into TUI Travel shares, demonstrating investor confidence in the business.

– Cash conversion rate of 85% (2013: 93%)3 ahead of 70% target; continued strong ROIC performance 14.6% (2013: 14.8%).

– A second interim dividend of 20.5p will be payable on completion of the merger. This includes 10.5p in lieu of a final dividend (2013: 9.75p).

• Pleased with current trading

– Winter 2014/15 – 63% of the programme sold with Mainstream bookings and average selling prices up 1%.

– Strong trading in UK continues across both seasons with bookings up 4% for Winter 2014/15 (53% sold) and 9% for Summer 2015 (22% sold).

Peter Long, Chief Executive of TUI Travel PLC, commented:

“We have delivered another year of out-performance against our growth roadmap achieving an underlying operating profit growth of 11% at constant currency rates2. This demonstrates the strength and resilience of our business model in what has been a competitive trading environment for many tour operators and airlines. The combination of our market leadership position, scale, focuson unique holidays distributed increasingly online and our relationship with the customer throughout their whole holiday experience continues to provide a strong basis for sustainable, profitable growth.

“The merger with TUI AG will strengthen and future-proof our combined Group. It will also enhance the certainty of long-term unique holiday growth and reinforce our clear competitive advantage through further control over the end-to-end customer experience. This will mark the start of an exciting new phase of growth, delivering significant opportunities and value to customers, employees and shareholders.”
As of 07:13 GMT, Thursday, 04 December, TUI Travel PLC share price is 428.70p.

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