LONDON (ShareCast) - (ShareCast News) - Anglo-German travel giant Tui Group grew revenues and underlying operating profits impressively in the third quarter, also tightening its full year operating profit growth guidance to 12.5-15%.
Consolidated turnover after the German and English arms merged in December increased by 6.4% to €5.08bn, from strong growth from hotels, resports and cruises.

Also, gains from northern European holidaymakers in UK & Ireland, Nordics, Canada and Russia more than offset declines in other markets, notably Germany and France.

Underlying group earnings before interest, tax and amortisation (EBITA) expanded 18.6% to €194.2m in the quarter, despite €10m of repatriation and cancellation costs from the terrorist attack on tourists in Tunisia in June.

The attack was one of several factors hitting the western region of Netherlands, Belgium and France, resulting in €92m hit to operating result, including the impact of Easter and foreign exchange translation.



"Supporting the families of the victims, customers and its employees remains the highest priority of the group," Tui said.

It added that cumulative group-wide summer bookings to Greece remain ahead of prior year despite some temporary small deviations from the German and Belgian public, which the company said "demonstrates the resilience and strength of the group's integrated business model, even in periods of crisis".

In the nine months of the year so far, profits are roughly €82m ahead of the prior year, or €60m on an underlying basis, which means only modest growth in the fourth quarter is required to meet forecasts.

In spite of the influence of geopolitical events, the reiteration of guidance for current year was accompanied by guidance that profits growth over the coming three years are expected to be up "at least 10%" per year.

Overall, analysts at Shore Capital saw this as a robust statement when set against the geopolitical events in the period.

"Full year guidance has been maintained, highlighting the flexibility in the business model, and the profit make-up towards higher value hotels, cruise ships and Hotelbeds suggests improving quality of earnings.

"We estimate that these three assets alone could be worth some £7 per share, implying a single digit p/e ratio for the tour operator segment, and have a five year roadmap to €2 per share by 2020 which we believe could be worth circa £25 per share."

Shares in Tui were up 8.6% to 1,135p by 0900 BST on Thursday.

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