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TUI AG (TUI.L)

LSE - LSE Delayed price. Currency in GBp
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270.60+4.70 (+1.77%)
At close: 4:35PM BST
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Previous close265.90
Open272.60
Bid210.00 x 0
Ask350.00 x 0
Day's range264.90 - 273.41
52-week range218.00 - 1,090.00
Volume1,408,383
Avg. volume2,999,290
Market cap1.598B
Beta (5Y monthly)1.61
PE ratio (TTM)N/A
EPS (TTM)N/A
Earnings dateN/A
Forward dividend & yield0.45 (16.85%)
Ex-dividend date12 Feb 2020
1y target est15.65
  • Will Covid-19 Steal Christmas in the U.K. This Year?
    Bloomberg

    Will Covid-19 Steal Christmas in the U.K. This Year?

    (Bloomberg Opinion) -- New British measures aimed at slowing Covid-19’s spread, before it wreaks more drastic economic consequences, threaten to derail the country’s nascent consumer recovery. Many Brits had been hoping that the rebound would pick up steam with the impending Halloween celebrations and half-term school holidays.The measures from Boris Johnson’s government include new restrictions on pubs and restaurants, fresh advice for people to work from home if they can and keeping to six the number of people who can socialize together. From Thursday, pubs and restaurants will be limited to table service and they’ll have to close at 10 p.m. With last orders at 9 p.m., many businesses will effectively lose an entire sitting.When areas in northeast England introduced local hospitality restrictions last week, there was a sudden drop off in trade as people simply stayed home. But the implications are broader than the decision about whether to go out for the evening.All of this feels just steps away from a more comprehensive lockdown, and comes with the very real danger of undermining confidence. The measures send a signal to consumers that the virus is a threat once more, raising questions about whether social distancing measures already in place are enough. Just as they were starting to go out and spend again, Brits will undoubtedly become more nervous about both the health and economic implications of the pandemic.The timing is particularly difficult for consumer companies. Halloween can be a significant event for supermarkets and variety retailers such as B&M European Value Retail SA, which benefit from demand for sweets and plastic pumpkins. It’s an event that sets the stage for the rest of the year, and this year was seen especially as a barometer for things to come. Beyond the trick-or-treating, Halloween has become popular with adults too, who revel in partying at pubs and clubs in ghoulish costumes. That’s unlikely to be the case this year.The half-term holiday was also poised to be a big getaway week for tour operators and airlines. Travel companies had hoped business would pick up after many British families skipped their summer vacation abroad. With recent changes to travel advice, that demand has waned. European tour operator TUI AG said on Tuesday it had cut capacity for the winter season by a further 20%.It’s now impossible to guess what the year-end holiday season — which accounts for a large proportion of retailers’ and restaurants’ profits — will be like. That helps explain conflicting outlooks from British retailers last week. Next Plc was cautious. By contrast, John Lewis Partership Plc said it was expecting Christmas sales to be the same or better than 2019.Both views have their supporters. Affluent employees who have worked from home have amassed savings, which they might spend online. Those who’ve lost their job, or face redundancy with the cessation of the U.K. furlough support at the end of October, will be thinking differently. Whitbread Plc, owner of the Premier Inn hotel chain, said on Tuesday that it planned to cut as many as 6,000 jobs, almost a fifth of its workforce.There is a chance that by acting now with more stringent measures, the government will make sure some of the pain is out of the way by Christmas, saving the crucial trading period for retailers and restaurants. That’s highly uncertain, though, especially when so much spending in the run-up to the holiday will be determined by whether consumers have the festive feel-good factor. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Holiday Tours Are a Bad Business in a Pandemic
    Bloomberg

    Holiday Tours Are a Bad Business in a Pandemic

    (Bloomberg Opinion) -- TUI AG, the world’s biggest package-holiday company, has just secured enough government funding to see it through the lean Covid-affected winter season. A glance at its latest quarterly earnings, released on Thursday, shows this is probably just as well.The German company reported a 1.1 billion-euro ($1.3 billion) operating loss in the quarter ending June 30, after revenue slumped 98%. It said it burned through 550 million euros to 650 million euros a month during the period. The London-listed shares fell 5%.Some people have started to brave air travel again in recent weeks, but TUI acknowledged that the situation was still fragile. Demand hasn’t fully recovered since draconian restrictions were lifted, and renewed quarantine measures against popular destinations such as Spain have added to the pain.Consumer confidence is at risk from a resurgence in cases in some countries and worsening personal finances from job losses and lost business due to lockdowns. Holidaymakers are still reluctant to fly long-haul, important for the autumn-winter season, when TUI now plans to slash capacity by 40%.The good news is that it has the German state’s backing. Additional funding agreed on Wednesday, which brought the overall aid package to 3 billion euros, is a safety net to get it through the traditionally quieter winter season, when it needs to pay its suppliers for the previous summer. It removed the threat of a short-term cash crunch, which would be devastating. When consumers are nervous about a holiday company’s finances, they avoid booking with it, and the situation spirals. Just look at what happened to British travel giant Thomas Cook, which collapsed last year.The aid comes with strings attached, though, including restricting TUI's ability to pay executive bonuses. It also includes a 150 million-euro convertible bond, which would give the German state a 9% stake in the company if ever TUI were unable to meet the interest costs.The question is how long can TUI, which has sold just 16% of its originally planned summer 2020 program, keep managing the uncertainties brought by this virus? And if the outbreak doesn’t go away soon, how much job cutting and asset sales will it take to be nimble enough to operate in a radically new market environment?While bookings for next summer are up by 145%, some of that is pent up demand from people who canceled this year’s vacations. Even so, TUI plans to operate at 80% of capacity for next summer, an indication it’s preparing for better times ahead. It optimistically expects conditions to return to normal by 2022, based on the demand it has seen since July and the level of bookings going forward.Against this backdrop, leverage looks too high. Net debt, including lease liabilities, stood at just under 6 billion euros at June 30.  The company has a market capitalization of about 2.2 billion euros. It also faces about 300 million of bonds maturing in October 2021.TUI has already undertaken some self-help measures, including a plane leaseback deal and the sale of Hapag-Lloyd Cruises to a company it jointly owns with Royal Caribbean Cruises. But more disposals look inevitable. Up until now, TUI’s strategy has been asset heavy: It has an airline, hotels around the world and cruise ships. TUI still owns the ships within its Marella cruises business for example, so a sale and leaseback of these assets, as well as hotel real estate, is possible. It could also enter into a joint venture for its airline.The company said on Thursday that it was looking at options to strengthen the balance sheet, including a rights issue, although this could prove tricky given that the London-listed shares are down almost 60% over the past year. It has also outlined a big cost reduction program to save 300 million euros a year by 2023. With the extra funding and some glimmers of hope on trading, TUI just booked itself some winter sun. The danger is it turns out to be a mini-break from the ravages of the Covid-19 pandemic, rather than a long-term stay.  This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • If We Can’t Go to Spain, Greece Will Do Nicely
    Bloomberg

    If We Can’t Go to Spain, Greece Will Do Nicely

    (Bloomberg Opinion) -- The European travel industry had a bad case of summertime sadness after the U.K. introduced restrictions last week on vacation getaways to Spain.But EasyJet Plc provided reason to cheer up on Tuesday when it said some travelers were still determined to take their holidays despite the prospect of having to self-isolate for two weeks on their return.In fact, with more people looking to fly over the summer than it had expected, the low-cost airline is adding flights through the end of September. It will operate at 40% of capacity in its fourth quarter, up from the 30% it had previously planned for.Yes, EasyJet’s new bookings to Spain fell sharply after the British government warned against non-essential travel to the country, and then extended the restrictions to the Canary and Balearic Islands. But a surprising number of passengers who’d already booked are still planning to head to the country, even if it means they have to quarantine when they get home. The same holds for Portugal. Faro, in the southern Algarve region, is one of EasyJet’s most popular destinations this summer, despite a similar U.K. government warning for that country.This is mildly encouraging for the European travel industry, stoking hopes that the summer of 2020 won’t be a total washout. It may be evidence of people learning to live with the virus, and a sense of comfort about being able to practice social distancing at their destination. For many, isolation is also manageable because they’ve already been working from home. Some won’t return to the office until at least the start of 2021 anyway.There is clearly a post-lockdown desire to travel, despite the health risks, for a spot of summer sun. TUI AG, the world’s biggest package-holiday company, has seen Brits switch their holidays from Spain to Greece. When governments advise consumers against all but essential travel, tour operators cancel flights and passengers are entitled to a refund. Airlines typically keep flying. As well as EasyJet, which is seeing high demand for travel to Turkey and Croatia, Ryanair Holdings Plc is operating flights to Spain normally.There may also be some expectation that quarantine policies could change. Portugal is in talks with the U.K. to lift the restrictions. Britain has also been looking at ways to ease the Spanish rules.Despite EasyJet’s crumb of comfort, the medium-term outlook still remains highly uncertain for Europe’s travel industry. Some consumers may still be unwilling to book a package tour, which usually involves staying in a hotel. So people’s last-minute summer travel budgets may go to booking a flight and a holiday rental, such as those offered by Airbnb Inc., where they can keep their distance from other holidaymakers.As I’ve written, the U.K.’s advice on Spain was brought in suddenly, rocking consumer confidence and creating confusion. Depending on how the situation evolves, there’s a risk that other countries, such as Germany, introduce similar curbs or that other destinations will face restrictions. Germany is currently advising travelers to avoid the worst-affected areas in Spain.Meanwhile, concerns about a potential second wave of the outbreak might dampen demand beyond the summer. Autumn and winter bookings were looking promising, but EasyJet said that while early signs were good for peak periods, such as Christmas, there was little visibility across the winter season as a whole.It may be that desperate holidaymakers are taking advantage of what they perceive as a window before more travel bans or virus flare-ups. That doesn’t bode well for demand further out. For now, beleaguered airlines and tour operators can enjoy some relief from their cruel summer.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.