The tour operator blamed negative foreign currency translation of 5%, partially offset by organic growth of 3%, for the loss in revenues. The groups underlying operating profits also declined to £74 million from £88 million in the prior-year quarter as the impact of an early Easter holiday period.
Citing the company’s performance in the third quarter, Peter Long, Chief Executive of TUI Travel PLC, said, “We are pleased with our performance, driven by our strategy of differentiated and exclusive product with a focus on online distribution. We are significantly outperforming the market in the UK.”
“Summer 2012 volumes have improved in most key markets since our last update. We are seeing strong demand and lates margins for the peak Summer period. Our Winter 2012/2013 programme has had an encouraging start..,” he added.
TUI Travel claimed that growing demand for differentiated product and a focus on online bookings has seen distribution through its own channels grow 6% points to 90%. In A&D, Summer 2012 bookings are up 9% and sales up 17% versus the prior year. The group also reported a cashflow improvement of £52 million in the third quarter compared with the same period last year.
Looking at the encouraging start to Winter 2012/13 trading, TUI Travel is confident of exceeding its full year expectations based on like-for-like exchange rates. However, the impact of retranslation of fourth quarter eurozone profits at current exchange rates leaves it to believe that it will perform in line with its expectations for the full-year.