p16 city feb13 11/2/09 19:42 Page 16
City & finance
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Tui on track for
‘£383m profit’
TUI TRAVEL is confident cuts in capacity and sav-
ings through its merger with First Choice will help
it meet profit expectations this financial year.
A survey of 17 analysts for Reuters has shown
a consensus expectation of £383m pre-tax profit.
Tui made the prediction despite suffering
a 20% drop in the number of people booking
summer 2009 holidays by February 1, compared
with the same period in 2007-08.
So far, 31% of Tui’s summer capacity has been
sold, two percentage points behind last year.
However, summer capacity has been cut by Hoseasons
17% and there is scope to cut further.
Tui said the merger would deliver another
£100m of savings in this financial year, on top of
the £30m already achieved, meaning it was on
Hoseasons is not
course for its target for £175m in annual savings.
Overall, summer 2009 customer numbers
were down by 19%, with long-haul down by 26%,
short-haul by 22% and medium-haul by 16%. for sale, insists HG
However, Tui said average selling prices were
up by 11% over last year, and 87% of customers
Private equity firm HG Capital denies it will sell the domestic
who travelled with Tui before but not yet booked
operator, despite the closure of its consumer and leisure
this year said they still intended to take a
holiday with the company.
investment team. Chris Gray reports
THE OWNER of Hoseasons has scrapped its on currency exchange rates, had trusted brand
EasyJet buoyed by
consumer and leisure investment team, names and did not rely on high street distribu-
prompting speculation it is about to sell the tion – and Hoseasons met all those criteria.
early 2009 sales
self-catering specialist. However, Nick Batram, a leisure analyst at
Private equity firm HG Capital has owned investment bank KBC Peel Hunt, said there
Hoseasons for five years, a typical length of would be interest in Hoseasons from other
EASYJET has claimed a “flight to value” by time a private equity house holds an investment private equity companies which did have cash
business and leisure passengers gave it a better before selling. and were looking for acquisitions.
than expected start to 2009. The closure of its consumer and leisure team, “The Hoseasons business will come back on
Chairman Sir Colin Chandler said business in a reorganisation that made about three staff the market and it’s probably going to be sooner
travellers were switching to budget carriers to redundant, was seen as a signal that a sale could rather than later,” he said.
save money, and tourists were switching from be imminent. Others suggested big firms such as Tui or
long-haul in favour of easyJet’s short-haul routes. HG chief executive Ian Armitage played down Thomas Cook might be interested in Hoseasons
EasyJet expects to be profitable in the full year the rumours. He said Hoseasons could be a to boost their presence in the domestic market.
to the end of September 2009 if fuel prices and 10-year investment and was profitable, so there Hoseaseasons chief executive Richard Carrick
currency rates stay much as they are now. was no need to sell now, in the middle of a credit declined to comment on the prospects of a sale.
In January, easyJet’s load factors were up 3.7 crunch and recession. When HG bought Hoseasons for £40m in 2003
percentage points to 75.7%, and passenger num- Hoseasons would now come under a “portfolio” and Carrick was brought in as chief executive the
bers were up 2.8% to 2.8 million, on capacity team at HG that ran existing investments rather firm had a plan to grow through acquisitions.
virtually unchanged from the previous year. than making new ones, he said. It bought French villa and farmhouse
Armitage added that HG was still interested in specialist Bowhills the following year, but no
■ EasyJet and Aer Lingus start price war, p28 travel as long as companies were not dependent other deals materialised.
16 13.02.2009
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