TT. Tui Travel

TIDMTT.

RNS Number : 7586U

TUI Travel PLC

21 October 2010

21 October 2010

TUI Travel PLC

("TUI Travel")

Restatement of Prior Year Financial Results

On 10 August 2010, as part of its results for the third quarter and nine months ended 30 June 2010 (unaudited), TUI Travel reported that following completion of the integration of IT systems in its UK mainstream business, it had written off a number of legacy receivable balances that had built up over an extended period of time, amounting in total to GBP29m. This balance was reported as a separately disclosed item.

The ongoing audit for the full year ended September 2010 has highlighted a further GBP88m of irrecoverable balances that now need to be written off, giving a total of GBP117m. These have arisen as a result of failures to reconcile balances adequately in legacy systems in the retail and tour operator businesses in TUI UK. As a result, TUI Travel now believes it is appropriate to restate its results for the year ended 30 September 2009.

The adjustments to the results are non-cash in nature and have no impact on the company's cash and net debt position. As a result of process improvements during the year, the impact in 2010 has been limited to GBP5m, in line with the third quarter statement. Accordingly, TUI Travel remains confident that full year results for the year ended 30 September 2010 will be in line with previous guidance and that net debt will be lower than previous guidance.

The adjustments will include the following:

 
      --   A reduction of underlying operating profit for the year ended 
            30 September 2009 of GBP42m from GBP443m to GBP401m, all 
            of which relates to TUI UK. 
      --   A reduction in opening reserves at 1 October 2008 of GBP70m, 
            from GBP2,286m to GBP2,216m. 
      --   As a result of the two adjustments above the separately disclosed 
            items of GBP29m announced in the Q3 results will no longer 
            be required. 
      --   A reduction in the underlying earnings per share for the 
            year ended 30 September 2009 of 2.8p from 23.8p to 21.0p. 
 

As part of the year end closing process, a full and detailed review of systems and processes has been conducted and TUI Travel is satisfied that the weaknesses in the systems have been rectified. TUI UK is now under a new leadership team of Johan Lundgren, MD Northern Region and Colin McKinlay, who joined on 1 October 2010 as Finance Director from Homeserve plc, where he was UK Finance Director and prior to that gained extensive experience within the travel industry.

Following discussions between Peter Long, Chief Executive and Paul Bowtell, Chief Financial Officer, Paul has decided that it is appropriate to offer his resignation and they have agreed that he will leave the Company at the end of 2010.

Commenting, Peter Long said: "It is now clear that at the time of merger there were weaknesses in the legacy systems we chose to use in the TUI UK business. Despite the fact that this situation had built up over a number of years, Paul is behaving honourably and I am disappointed that he will be leaving the Group. He is one of the most capable Chief Financial Officers I know and we have had an extremely good working relationship over the six years that we have been a team. I have specifically asked Paul to remain with the business to see through the full year audit and production of our preliminary results. I will miss working with him and wish him every success for the future. "

Current Trading

The company can confirm that the stronger recent trading trends in its last trading update have continued.

 
 Winter 2010/11 YoY      Cumulative        Bookings since       Cumulative 
 customer booking      bookings at 26     previous trading    bookings at 17 
 variation %                 Sep             statement              Oct 
 
 UK                                  +7                 +3                  +6 
 Nordic Region                      +35                +17                 +32 
 Germany                            +12                 +7                 +10 
 France                             +14                 +9                 +13 
 Belgium                            +16                +12                 +15 
 Netherlands                        +13                +10                 +12 
-------------------  ------------------  -----------------  ------------------ 
 

Preliminary Results

TUI Travel PLC will announce its preliminary results for the year ended 30 September 2010 on 2 December 2010.

Enquiries:

 
 Analysts and Investors 
 Peter Long, Chief Executive                       Tel: 01293 645 714 
 Paul Bowtell, Chief Financial Officer             Tel: 01293 645 713 
 Andy Jones, Director of Finance & Investor        Tel: 01293 645 795 
  Relations 
 Paul Rushton, Head of Investor Relations          Tel: 01293 645 795 
 
 Press: 
 Lesley Allan, Corporate Communications Director   Tel: 01293 645 774 
 Michelle Jeffery, Corporate Communications        Tel: 01293 645 776 
  Manager 
 Michael Sandler / Kate Hough (Hudson Sandler)     Tel: 020 7796 4133 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

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