European travel group Tui has defied the “challenging market” and posted a 10% growth in profits.
Whilst rivals struggled amid Brexit concerns, the summer’s heatwave and airline strikes, Tui saw a 10.9% rise in annual earnings.
Chief executive Fritz Joussen said: “We are investing, we are growing with Tui’s high-margin products and services and our businesses are increasingly scaling.”
“Today, our own holiday experiences content account for more than 70% of our earnings: hotels, cruises, excursions and destination activities.”
“This enables us to clearly differentiate ourselves from the competition. With more than 20 million customers, use of state-of-the-art IT and intelligent customer systems, we have considerable potential for new business, turnover and earnings.
“We will continue our successful transformation: The next step will transform Tui into a digital and platform organisation,” he added.
Rival Thomas Cook (LON: TCG) has seen shares price plunge this year following several profit warnings and a £163 million loss following heatwave and strikes. Shares in the group edged up on Wednesday after the CEO shared confidence for the year ahead, saying: “The latest market hit us this year. We need to be stronger in managing our commitments and have already made changes in that area. We also need to be faster at executing our strategy around our own-branded product. We’ve had a good start for bookings next year, and have confidence in 2019, but need to focus on margin and profit.”
David Madden, a market analyst at CMC Markets UK, said: “The travel sector across the board has had a difficult time as the unusually warm weather encouraged prospective holidaymakers to stay at home. Given what has gone on in the travel sector lately, it was an impressive performance from Tui.”
The holiday group has seen double-digit growth for the past three years and expects profits to grow at a similar level next year.
Dividend per share increased by 10.9% to €0.72.
Shares in Tui (LON: TUI) are trading +5.28% (1104GMT).
