Thomson and First Choice owner Tui Travel posted an 8% jump in annual pre tax profits today to £390 million, in sharp contrast to losses of £590 million recorded by rival Thomas Cook.
Tui described its UK performance as “outstanding” with an underlying profit up to £197 million from £149 million in 2011. Operating margins grew to 5.4% from 4.2%
Online sales were up three percentage points to 33% of mainstream sales. Direct distribution were up two percentage points to 65% of mainstream sales.
Sales of higher margin ‘unique’ holidays rose by three percentage points to 65% of all mainstream holidays.
Tui described 2013 bookings from the UK as strong with “significant growth in market share” as it took advantage of Cook’s woes.
Chief executive Peter Long said: “The year has been one of many successes. We have delivered record Group profits while the UK achieved outstanding results both in terms of profit and margin all against a backdrop of continued economic uncertainty.
“Our proven strategy continues to evolve and drive strong trading momentum throughout the Group. Overall, with the exception of France, trading for both Winter 2012/13 and Summer 2013 is very encouraging.
“We are today pleased to announce the next stage of our strategic development. This roadmap for growth, built on our detailed understanding of the market and robust business models, means that we are well placed to continue to deliver long-term sustainable growth, which in turn, will drive further value for both our shareholders and our customers.”
Tui revealed that further restructuring initiatives in the UK cost £19 million including rationalising the retail distribution network.
In addition there was £15 million of restructuring costs incurred in the Specialist & Activity Sector, £8 million in the Accommodation & Destinations Sector and £17 million of incurred in group head office companies.
Long told the BBC: “We’ve been on a different journey (to Cook). It shows the resilience of our model and that our customers still want their summer holiday.”