TUI (LON:TT), the owner of Thompson Holidays, reported a narrower loss than expected on Tuesday despite several months of industrial action.
The first quarter results showed a 17 percent improvement on last year’s loss, falling to £66 million for the three months to December 31st.
Turnover rose 8.5 percent, with underlying EBITDA up 27.5 percent. The group also maintained its forecast for core earnings to rise by at least 10 percent this year at constant currency levels.
German company TUI AG, who have owned the British Thomson and First Choice brands since taking full control of UK-listed TUI Travel, called the underlying loss ‘seasonal’ and saw shares jump 3.5 percent higher on Tuesday morning.
Looking forward, TUI said that “at this relatively early stage of the booking cycle, Summer trading remains in line with our expectations.” The Source Markets’ programme is 35 percent sold, in line with prior year, with revenues up 9 percent and bookings up 4 percent.
In a statement, the company added: “We have delivered a good operational performance in Q1 and current trading remains in line with our expectations. We are continuing to deliver our growth strategy, transforming the business as the world’s leading integrated tourism business based on own hotel and cruise brands, with further openings and launches planned for the coming year.”
The loss was exacerbated by industrial action from the staff at the German company’s Fly wing, with a new protest strategy causing a 22 million euro hit to finances.
In a note to clients, Shore Capital analyst Greg Johnson reiterated a buy rating on TUI, adding: “The completion of the sale of the Travelopia assets was on a 2016A EV/EBIT multiple of over 14x. In line with strategy, we would expect these proceeds to reinvested over time in cruise and hotel assets. We see the price as attractive for TUI”.