In contrast to the challenges faced by rival Thomas Cook Group, TUI Travel PLC, Europe’s largest travel firm, reported record operating profits for the fiscal year of £471 million, up 18 percent, despite the tough economic environment. TUI also claimed record profits delivered by the UK as a result of increased sales.
Pretax profit was put at £144 million ($224.6 million), from a loss of £73 million last year, while net profit was £85 million. London-based TUI reported preliminary results for the year ending September 30. Record cash flow generation was also reported, providing balance sheet strength, the company said.
Peter Long, chief executive of TUI Travel, said, “We are very pleased with our robust performance in 2011 and have delivered another year of profit growth, against a backdrop of unrest in key North African destinations and weak consumer sentiment in some source markets. The UK, Nordic region, Belgium, the Netherlands, Canada and Austria delivered record results. “
“These achievements reflect the strength of our strategy to increase differentiated and exclusive product sales, increase controlled distribution with a focus on online (sales) to enhance our customer access and reduce distribution costs, and our delivery of the turnaround and cost efficiency programs,” Long said.
In contrast, Thomas Cook Group Plc, ranked as the second largest European travel company, scrambled last month to secure a new £200m loan from major banks after its shares took a hit. The move “significantly improves the robustness of the Group’s financial position,” the company reported in a statement. Thomas Cook will also reduce its debt.
The Thomas Cook Group will announce its preliminary results for the twelve months ended September 30, 2011 later this month. Thomas Cook is one of the world's leading leisure travel groups with sales of £8.9 billion and 22.5 million customers. The firm has 1,011 retail outlets.