- Highest-ever first-quarter revenue
- Shares gain 8% at the open
- Possible de-listing from London
Shares in TUI (TUI) were up over 8% to 627p as the market opened after the travel operator delivered its best-ever first-quarter revenue of €4.3 billion and €6 million of underlying EBIT (earnings before interest taxation).
The travel operator said the reason for the record performance was ‘higher demand at improved prices and rates’.
Over the past year TUI shares have fallen 40%, but in the last three months they have gained 21%.
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HIGHER CUSTOMER NUMBERS
The number of customers in the first quarter increased by 6% to 3.5 million compared to a year earlier, while the average load factor of 86% was 1% higher than the same period last year.
The company also reported a reduction in net debt year-on-year by €1.3 billion to €4 billion as of 31 December 2023 from €5.3 billion in the prior year.
TUI reconfirmed its guidance for full year 2024 published in its 2023 annual report. The company expects revenue to increase by at least 10% year-on-year and underlying EBIT to increase 25% year-on-year.
Strong summer bookings help TUI deliver first profitable third quarter since Covid
POSSIBLE DE-LISTING
Results news aside, investors and the market are waiting for the outcome of TUI’s annual general meeting later this morning when the company holds a vote on whether to de-list from the London Stock Exchange.
The FTSE 250 travel operator is currently dual-listed on the LSE and in Frankfurt, Germany.
Delisting the German company requires a majority of 75% of votes at the AGM.
TUI has urged investors to back its move from London to Frankfurt to lower costs and provide ‘support for EU (European Union) airline ownership.’
EXPERT VIEW
Russ Mould, investment director at AJ Bell said: ‘That TUI seems to be getting back on track just as it primes for an exit from the London market feels like rubbing salt in the wounds.
‘The company’s first-quarter numbers were better than expected as it notably swung from a big loss to a modest profit. A winning combination of higher demand and higher prices helped to deliver stellar results in what is traditionally the weakest period for the travel sector.
‘It shows people are still willing to prioritise spending on holidays despite pressures on household budgets. How much further operators can push up prices is up for debate.
‘There seems a good chance the sector may have to absorb a greater proportion of any increase in costs in the future if it doesn’t want to price too big a chunk of the population out of overseas holidays.’
‘At a meeting later, TUI is pushing for shareholders to vote to delist from the London Stock Exchange – in yet another blow to the prestige of the UK as a listing venue. There is an obvious logic to upgrading to a prime listing in Frankfurt given it is a German company and more of its shares are traded in its home country.‘
NOTE: This story will be updated as soon as the vote on the London listing is announced
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DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Ian Conway) own shares in AJ Bell.
