As TUI reports its first half results Ian Forrest, investment research analyst at The Share Centre, explained what it means for investors.
“Global tourism group TUI today (Sunday 15th may 2017) reported a strong first half trading performance driven by good sales growth at its hotels and cruise businesses.
"Overall turnover was up 8.2% to €6.4bn although investors may want to note that losses increased by 3.8% to €214.3m.
The group did however state that current trading for the summer 2017 period remains in line with its expectations and it reiterated previous guidance for a rise in full year earnings of at least 10%.
“The results continue to demonstrate the trend for holidaymakers to move away from Turkey and North Africa and towards the Western Mediterranean and Caribbean as a result of political unrest. Closer to home and despite the Brexit backdrop, TUI said that in the UK, demand for holidays remains resilient.
"Moreover, the largest tourism group in the world was keen to reassure investors this morning that it its operational experience and balanced portfolio of markets means it is well placed to deal with any turbulent macroeconomic and geopolitical challenges.
“The long term growth potential, healthy dividend and reducing competition in the sector means we continue to find this group attractive. We therefore continue to recommend TUI as a ‘buy’ for medium risk investors seeking a mixture of growth and income.”