TUI predicts at least 10% earnings growth this year

TUI Group said it expects at least 10% earnings growth in 2018 after reporting solid results for last year.

The tour operator said there was strong demand for its holidays and that its UK business was holding up well despite uncertainty over Brexit.

Underlying earnings before interest, tax and amortisation rose 12% to €1.1bn (£970m) in the year to the end of September. The result was marginally ahead of an earlier prediction of an increase of at least 10%. The company said it expects earnings to rise by at least 10% in the current year.

TUI said: "Demand for our holidays, hotels and cruises remains strong […] Despite the Brexit backdrop, the UK continues to deliver a resilient performance in line with our expectations."

For winter 2017/18 revenue is up 6%, led by 9% growth in Germany where 63% of holidays are sold. In the UK, revenue is up 3% though customer numbers fell 4% with 57% of holidays sold. TUI said performance in the UK, where it has scrapped the Thomson brand, reflects a strong start to the year before and that the percentage of sold holidays was in line with last year.

TUI said margins for package holidays were "normalising" but that its margins remain healthy. Shares of its rival, Thomas Cook, plunged in November when it reported weak trading in the UK, including shrinking margins on Spanish holidays.

TUI took a €15m charge from the insolvency of Air Berlin after the German airline defaulted on payments for aircraft and crew leased to it by TUI.