Investors advised to ‘hold’ despite Tui Travel profit rise

As Tui Travel reports its Q3 results Sheridan Admans, investment research manager at The Share Centre, explains what it means for investors.

“The owner of First Choice Holidays, Tui Travel, reported some encouraging third quarter results today which showed a 21% rise in operating profits. Revenue was down 2% to £3.8bn, although adverse foreign exchange translation reduced the value of sales by 4%. Q3 saw increased sales of Tui’s unique holiday offerings, higher selling prices and news that more than half of this year’s summer holidays have been booked online for the first time.

Trading in Emerging Markets was flat during the period and there may be some future impact caused by the current political tensions in Russia and Ukraine. Investors should also be aware of the possible merger proposal of Tui Travel’s German parent group, TUI AG. We continue to recommend the stock as a ‘hold’ for investors given the improving economic backdrop in the UK and the healthy dividend yield.”