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TUI tops the UK’s blue-chips this morning as investors welcome a Q1 report card (Oct-Dec) showing revenues +8.1% YoY, a narrower seasonal net loss and significantly improved underlying profitability.
Shareholders are comforted by strong demand for Holidays in the Northern and Central regions, summer already 35% sold (in-line) and continued improvement in destinations such as Turkey and North Africa which had been shunned following acts of terrorism. Very reassuring too is the growing Cruises segment faring so well with revenues and profits jumping in spite of much implement weather in H2 last year.
What’s really driving the shares to fresh record highs (10% bounce from last week’s sell-off lows), however, is likely lower debt and improved underlying profitability (excluding one-offs, disposals/acquisitions, restructuring charges etc; awkwardly plentiful in the latest period) leaving management comfortable enough – even at this early stage – reiterating FY growth guidance of underlying EBITA +10%, keeping it on track for a targeted doubling between FY14 and FY20.
Full steam ahead!
Mike van Dulken, Head of Research, 13 Feb 2018
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
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