TIDMTT.
RNS Number : 1851D
TUI Travel PLC
26 March 2014
26 March 2014
TUI Travel PLC
("TUI Travel")
Pre-Close Trading Update
Prior to entering its close period ahead of reporting its
Interim results for the six months ending 31 March 2014 on 13 May
2014, TUI Travel PLC announces the following update on current
trading.
Peter Long, Chief Executive of TUI Travel PLC, commented:
"We are pleased with trading during the Winter 2013/14 season,
with most of our programmes now almost fully sold. We have once
again successfully demonstrated the flexibility and resilience of
our business model enabling us to absorb the impacts of
geopolitical events more effectively, including the ongoing
turbulent political situation in Egypt.
Summer 2014 trading is in line with expectations, with a strong
online performance across Mainstream, particularly in the UK and
Germany. Demand for unique holidays also remains strong. Our
customers are increasingly seeing the benefits of our digital
transformation strategy, which in turn is driving conversion
improvements from our new web platforms. We remain on track to
deliver an H1 result broadly in line with last year, excluding the
timing of Easter, and are confident of achieving a full-year
performance in line with our target of growing underlying operating
profit by 7 to 10%(1) ."
Highlights
-- Robust Modern Mainstream model
* Winter 2013/14 trading closing out as expected, with
higher average selling prices across most of our key
source markets.
* Summer 2014 bookings are flat against tough
comparatives, with strong pricing and approximately
45% of the programme sold.
* Pleased with trading, particularly in the UK and
Germany.
* France on track to reduce operating losses through
restructuring and capacity management.
-- Unique holidays driving demand
* Rising demand for unique holidays continues and now
accounts for 72% of Mainstream Summer 2014 bookings,
up two percentage points on prior year.
* Strong online performance with Mainstream Summer 2014
online bookings up by 8%.
-- Accommodation Wholesaler growth
* Accommodation Wholesaler continues to build a global
leadership position with TTV up by 33% for Summer
2014.
(1) Constant currency basis assumes that constant foreign
exchange translation rates are applied to the underlying operating
result in the current and prior year
CURRENT TRADING & OUTLOOK
Winter 2013/14
Winter programmes across our Mainstream markets are now almost
fully sold. The season is ending with higher average selling prices
across the Sector overall, despite the weaker trading environment
in the Nordics. This is driven by a continued focus on growing our
core package holiday offering. Overall Mainstream bookings are down
by 6% with average selling prices up by 3%. This is in line with
expectations, driven by capacity cuts to Egypt and a removal of
loss-making routes within the French and German source markets.
Unique holidays account for 70% of all Mainstream bookings, up
four percentage points compared with this time last year, whilst
online sales continue to grow, accounting for 40% of Winter
holidays booked, up by five percentage points.
We continue to see strong trading in Accommodation Wholesaler
with TTV up by 20% and Specialist & Activity is closing out in
line with our expectations.
Current Trading(1) incl Egypt Winter 2013/14
YoY variation% Total Total Total Programme sold (%)
ASP(2) Sales(2) Customers(2)
MAINSTREAM
UK +3 +1 -1 93
Nordics -2 -3 -1 100
Germany +4 -5 -9 95
France tour operators +14 -30 -38 99
Other(3) +2 +1 -1
Total Mainstream +3 -4 -6 97
Accommodation Wholesaler(4) Flat +20 +20
------------------------------- -------- ---------- -------------- -------------------
(1) These statistics are up to 16 March 2014 and are shown on a
constant currency basis
(2) These statistics relate to all customers whether risk or
non-risk
(3) Other includes Austria, Belgium, Netherlands, Poland and
Switzerland
(4) These statistics refer to online accommodation businesses
only; Sales refer to total transaction value (TTV) and customers
refers to roomnights
Summer 2014
The Summer 2014 programme is trading in line with expectations
with flat Mainstream bookings overall against tough comparatives.
Average selling prices across Mainstream are up by 2%. We continue
to see strong demand for our unique holidays, which account for 72%
of Mainstream bookings, up two percentage points. Mainstream online
bookings are up 8%. Encouragingly, our German business continues to
grow online, with bookings up by 22%. To date, approximately 45% of
the overall Mainstream Summer programme has been sold, in line with
this time last year.
Accommodation Wholesaler continues to grow strongly with TTV up
by 33%, driven by the Latin American and Asian markets. We are also
encouraged by the recent trading performance in our restructured
Specialist & Activity business with sales up by 3%.
Fuel/Foreign exchange
Our strategy of hedging the majority of our fuel and currency
requirements for future seasons, as detailed below, remains
unchanged. This gives us certainty of costs when planning capacity
and pricing. The following table shows the percentage of our
forecast requirement that is currently hedged for Euros, US Dollars
and jet fuel.
Winter 2013/14 Summer 2014 Winter 2014/15
Euro 99% 87% 53%
US Dollars 98% 90% 68%
Jet Fuel 93% 87% 58%
As at 21 March 2014
--------------------- --------------- ------------ ---------------
Outlook
We are pleased with the development of Summer 2014 trading since
our last update, despite strong comparatives. The UK and German
businesses are driving a strong result and we are encouraged by the
sustained improvement within our Specialist & Activity and
French businesses. Our Accommodation Wholesaler business continues
to achieve sustained double-digit growth. We remain on track to
deliver an H1 result broadly in line with last year, excluding the
timing of Easter which falls in the second half of the year.
Our customers are increasingly seeing the benefits of our
digital transformation strategy, which in turn is driving
conversion improvements from our new web platforms. We are
confident that our strategy is driving performance and we continue
to expect to deliver 7 to 10% of underlying operating profit growth
for the 2014 financial year on a constant currency basis.
Interim Results
TUI Travel will announce its interim results for the six months
ended 31 March 2014 on 13 May 2014.
Enquiries:
Analysts & Investors
Andy Long, Director of Strategy & Investor Tel: +44 (0)1293 645 795
Relations
Tej Randhawa, Investor Relations Manager Tel: +44 (0)1293 645 829
Sarah Coomes, Investor Relations Manager Tel: +44 (0)1293 645 827
Press
Lesley Allan, Corporate Communications Director Tel: +44 (0)1293 645 790
Tress Wilson, External Communications Tel: +44 (0)1293 645 944
Michael Sandler / Katie Matthews (Hudson Sandler) Tel: +44 (0)20 7710 8911
This information is provided by RNS
The company news service from the London Stock Exchange
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