Shares in TUI Travel (LSE: TT) slipped marginally in early trade this morning, following the release of its preliminary results for the year ended 30 September 2013.
This comes despite the Thomson and First Choice owner reporting a record year, in which underlying operating profit grew by 20% to £589m. Basic earnings per share jumped by 19% to 30.8p, allowing management to lift the dividend 15% to 13.5p, raising the yield to match the FTSE 100 average of 3.5%.
Big things were expected of TUI Travel after shares in rival airline group Thomas Cook soared following a return to profit, and while TUI management cited the fact that the company exceeded its 2013 growth roadmap of 10%, statutory operating profit actually fell by 10% to£181m from £201m after a £188m one-off hit “relating to our Specialist & Activity business and French tour operator”.
Commenting on the results, chief executive Peter Long said:
“TUI Travel is structurally well positioned with a robust business model that gives us a long term competitive advantage. The business continues to deliver sustainable growth through our unique holiday experiences, increasingly distributed online, whilst leveraging its scale as one organisation. This in turn, will drive further value for both our customers and shareholders.
“Building on this year’s outperformance where we have achieved a 13% underlying operating profit growth, I remain confident that we will deliver consistently on our five year annualised growth target of between 7% to 10% at constant currency.”
Looking ahead, TUI has already sold 60% of its Winter 2013/14 programme, and is pleased with Summer 2014 trading, “despite strong comparatives from the prior year”.
