TUI share price flies high as group reports rise in FY earnings

on Dec 13, 2017

Shares in TUI Group (LON:TUI) have jumped about one percent in London this morning as the tour operator delivered a rise in full-year earnings despite feeling the impact of Air Berlin’s insolvency. The company also unveiled that it was preparing for Brexit and urged negotiators to find a ‘workable solution’ for airlines.

As of 09:29 GMT, TUI’s share price had jumped 0.99 percent higher to 1,423.00p, outperforming the broader UK market with the benchmark FTSE 100 index currently standing 0.03 percent lower at 7,498.27 points. The group’s shares have added just under a third to their value this year, as compared with an over 8.8-percent rise in the Footsie.

TUI delivers rise in earnings

TUI group updated investors on its full-year performance this morning, reporting a 12-percent increase in underlying EBITA for the full year to September 30, as well as a 34-percent increase in underlying earnings per share. The company noted that 56 percent of its earnings were now delivered from its own hotel and cruise brands. Air Berlin’s insolvency, however, trimmed the group’s earnings by €15 million.

TUI further said that it was expecting to deliver at least 10-percent growth in underlying EBITA in the coming financial year, and extended its previous guidance of at least 10 percent underlying EBITA compound annual growth rate to FY20.

The travel operator also hiked its payout to shareholders by 12 percent to €0.65 per share.

Brexit contingency plans

Going forward, TUI noted that it was putting contingency plans in place to manage potential disruption to its operations as a result of the Brexit process. The company, however, said that it ‘strongly’ encouraged “those involved in the negotiations to have a workable solution in place for the airlines, including that current arrangements are extended until such a solution is reached”.