TUI confident of five-year growth

TUI Travel has posted an increase in operating profit for the third quarter this year as it looks to growth for the next five years.

The travel company saw its Q3 underlying operating profit go up 18% for the three months up to 30 June 2013, with its operating profit up from GBP13m to GBP87m for the period.

Its unique holidays continued to push bookings, accounting for 85% of departures in Q3 – up 3% on last year.

The company said it has sold 84% of its summer 2013 programme at 30 June with 11% more sales and 4% more customers compared to last year. Its figures prompted the company to claim it is outperforming in the UK market. Online bookings at the company now account for 47% of sales on the UK, while its myThomson app has been downloaded 120,000 times since its launch.

The group posted savings of GBP11m and an improved operating cash flow of GBP198m, making an overall “encouraging” update. TUI is now “very confident” of a full-year underlying operating profit of at least 10% and said it is “well positioned” for growth in the next five years.

“Our strategy of offering our customers unique holiday experiences continues to drive sustainable growth. Our strong brands and market leadership position are fundamental in achieving this strategy. As we progress towards the end of the high-season, 84% of our Summer 2013 programme is now sold,” said Peter Long, chief executive of TUI on the results.

“The flexibility and robustness of our business model enables us to more effectively absorb the impacts of geopolitical events. 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,” he added.

For the nine months up to 30 June TUI saw an operating loss of GBP280m, up from a loss of GBP375m last year. The company has 60 Boeing aircraft on order with the potential for another 90 to fuel its growth plans.