Tui Travel today reported a 25% rise in pre-tax profits to £360 million despite the “challenging geopolitical and economic environment”.
In contrast to the turbulence experienced by rival Thomas Cook, which was forced to call for a £200 million cash injection from its banks, Europe’s largest travel group said it made record profits from the UK due to increased sales of differentiated and exclusive products, with online being the biggest channel.
Tui Travel chief executive Peter Long 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 to enhance our customer access and reduce distribution costs, and our delivery of the turnaround and cost efficiency programmes.
“We remain focused on this successful strategy and through our new business improvement programme we have self help measures in place to help offset the difficult macro-economic environment, including clear plans in place for Germany and France.
“In addition, we continue to strengthen our cash flow in order to fund the dividend and growth. All of which means that, even in the current challenging market conditions, we continue to operate from a position of strength.”
The company reported that revenue for the year to September rose by 9% to £14.6 billion.
Tui said its “business improvement target” had been increased by £29 million to £107 million, to be delivered in broadly even tranches over the next three years.