Tour operator TUI (TUI) continues to take advantage of strong demand for holidays, helping to drive earnings higher in the six months to 31 March.
The shares are down 2.1% to £17.17, perhaps reflecting some profit taking after a strong run heading into today's announcement. Even accounting for the fall, the stock is up 47.6% over the last 12 months.
Looking at the release in more detail, Spain remained popular among holidaymakers who are also setting their sights on Turkey and North Africa, as well as Greece.
Earnings before interest, tax, depreciation and amortisation (EBITDA) soared 26% to €158.6m and sales rose 7.2% to €6,813.5m.
TUI remains optimistic that it can again deliver at least 10% EBITDA growth in the year to 30 September via an ambitious expansion in its cruise and hotel operations.
By the end of 2019, TUI is targeting 40 to 50 new hotels.
These are expected to generate €3m in EBITDA per hotel and will be situated in exotic locations such as the Mediterranean and Caribbean.
Until 2023, TUI has new vessel launches planned for TUI Cruises, Marella and Hapag-Lloyd.
Demand for cruises sailed higher with EBITDA from this part of the business rising 24% to €92.4m.
All three brands delivered higher yields year-on-year, while TUI Cruises and Marella benefited from additional capacity.
Shore Capital analyst Greg Johnson says forward bookings are ‘encouraging’ in cruises and notes hotels are being ‘rebalanced’ towards recovering locations such as Turkey.
He is optimistic that further structural progress will yield double-digit earnings growth.
