16 December 2013

Annual revenue has passed the £15bn mark at Tui Travel, which owns Thomson and First Choice, following a strong performance in the UK and Germany.

Chief executive Peter Long described it as an "outstanding" year despite group pre-tax profits falling 10 per cent because of higher restructuring costs.

In the year to 30 September 2013, the Crawley-headquartered business posted sales of £15.05bn, up from £14.5bn a year ago. Pre-tax profits fell from £201m to £181m.

The drop in profits was largely because of a goodwill impairment charge of £188m which related to its specialist and activity division. Tui said underlying pre-tax profits, which also include acquisition-related expenses, increased by 21 per cent to £473m.

"The year has been outstanding and highlights that our strategy of delivering unique holidays sold directly to our customers is the right one," said Long.

"TUI Travel is structurally well positioned with a robust business model that gives us a long term competitive advantage.

"The business continues to deliver sustainable growth through our unique holiday experiences, increasingly distributed online, whilst leveraging its scale as one organisation."

Tui said performance for winter 2013/14 was in line with expectations and 60 per cent of its programme has been sold. It added it was pleased with early summer 2014 trading and the company hopes trading will be in line with last summer.

Long said: "Building on this year's outperformance where we have achieved a 13 per cent underlying operating profit growth, I remain confident that we will deliver consistently on our five year annualised growth target of between 7 per cent to 10 per cent at constant currency." Tui's board is recommending a final dividend of 9.75p per share, up from 8.3p last year.

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