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HomeRegional NewsAfricaPro forma underlying operating profit of £447m for TUI Travel PLC
TUI Travel PLC preliminary results for the year ended 30 September 2010

Pro forma underlying operating profit of £447m for TUI Travel PLC

Underlying operating profit and underlying profit before tax are from continuing operations and exclude separately disclosed items, amortisation of acquisition related expenses, goodwill impairment and joint ventures and associates. Underlying profit before tax also excludes separately disclosed financial expenses. Underlying earnings per share excludes the same items, net of related taxation.

Pro forma, unaudited results for the period, reported before the estimated financial impact of the closures of European airspace as a result of volcanic ash. See note 1 for basis of preparation.

  • Pro forma underlying operating profit of £447m (2009 restated: £401m).
  • Good turnaround progress in the year, particularly in Canada, Germany scheduled flying and Nouvelles Frontieres.
  • Social plan signed with employee representatives allows the implementation of the Corsair turnaround plan.
  • Differentiated products performed well in Summer 2010.
  • Sustained improvement in demand since July and trading for Winter 2010/11 and Summer 2011 remains positive.
  • Working capital improvements during the year resulted in a stronger than expected cash flow performance, with net debt lower at £249m (2009: £338m).
  • Final dividend of 7.8p per share, resulting in a full year dividend of 11.0p per share (2009: 10.7p).

Peter Long, Chief Executive of TUI Travel PLC, commented: "In a difficult trading environment we have continued to achieve incremental synergy benefits and made good progress in delivering the turnaround opportunity during the year. The 2010 result was, however, affected by a weaker trading performance in the UK, primarily due to increased winter losses resulting from capacity-led volume reductions in anticipation of lower demand. The early summer period was disrupted by a number of factors that increased customer uncertainty, including the volcanic ash related airspace closures. We then experienced an improvement in demand later in the Summer period and trading closed out well in all source markets, including the UK.

In the three years since the merger we have achieved a number of key successes, including the successful delivery of the synergy programme, the exit from scheduled flying operations in the UK and Germany, and the strong position we have established in the difficult Canadian source market.

Our journey is not complete, however, and we have a number of remaining initiatives to drive further profit improvements. Of these, the turnaround of Corsair, our French airline, is a significant opportunity and the agreement with employee representatives we are announcing today is an important milestone towards making the airline viable.

We have seen sustained improvement in demand since July and recent trading for future seasons remains positive in most source markets. Whilst current booking activity is good, driven by demand for our differentiated products, we remain cautious about 2011 given the continued economic uncertainty and the relatively early stage of the booking cycle".

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