Tui profits more than double as group weighs abandoning London Stock Exchange

Tui Group's profits more than doubled last year as the lack of pandemic-related restrictions and price increases delivered its biggest annual revenue ever.

Europe's largest tour operator has also dealt a potential blow to the city as discussions emerged that could lead to Tui delisting its primary listing from the London markets.

Some Tui shareholders believe the move could lead to lower costs, a centralization of liquidity and “potential benefits for the ownership and control requirements of airlines in the European Union.”

The German tourism company, founded exactly a century ago, announced that underlying earnings before interest and tax jumped 139 percent to €977 million (£836.7 million) in the 12 months ended September.

Sales rose by a quarter to a record €20.7 billion (£17.7 billion) due to strong demand in the summer season, with sales rising 11 percent to €8.5 billion in the fourth quarter.

This is despite bushfires on the Greek island of Rhodes, industrial action across Europe and the failure of the UK air traffic system over the August Bank Holiday weekend, which affected the journeys of millions of passengers.

Trading benefited from market and airline price increases and a lack of Covid-related travel restrictions, which led to unprecedented disruption and financial distress during the first half of the pandemic.

Higher occupancy rates and daily rates at cruise brands Mein Schiff, Hapag-Lloyd and Marella Cruises also boosted the company's revenue.

TUI Group shares rose 9.9 percent to 562.5p on Wednesday morning, taking 2023 losses to 22 percent.

The Hanover-based company expects further growth this year, with revenue expected to rise by at least 10 percent and underlying profit expected to increase by at least 25 percent.

For the upcoming winter season, the company noted that current bookings were 11 percent higher and average sales prices were 5 percent higher than last year.

Tui said bookings for next summer and prices were up 13 percent and 4 percent respectively.

Victoria Scholar, head of investments at Interactive Investor, said: 'The travel industry continues to enjoy the release of pent-up demand post-Covid, with individuals and families prioritizing their summer holidays over other expenses, even despite the costs of living crisis.

'However, with the increasing risk of recession in Britain, Germany and elsewhere, there are concerns that demand may have peaked with a slowdown in travel spending, especially during the quieter winter months.'

Tui is considering an exit from London

TUI also announced that it is considering abandoning the London Stock Exchange and changing its primary listing to the MDax market in Frankfurt.

The FTSE 100 group said it had 'recently' been approached by some shareholders asking whether the current listing arrangement was 'optimal and beneficial'.

It suggested the move could lead to lower costs, a centralization of liquidity and “potential benefits for the ownership and control requirements of airlines in the European Union.”

Investors will decide on the proposal at the company's annual general meeting on February 13. Three-quarters of them must vote in favor for the measure to be implemented.

If approved, the delisting would be the latest blow to London's stock market, which has struggled to retain and attract companies.

Both building materials supplier CRH Holdings and plumbing company Ferguson recently moved their primary listings to New York, while Softbank turned down the British capital to list ARM Holdings on Wall Street.