TUI: lowers forecasts on weak pound, shares tumble
(CercleFinance.com) - One week ahead of its quarterly earnings report, tour operator TUI has lowered its forecasts for the financial year to 30 September 2019, citing the continued weakness of the pound.
TUI now expects full-year 2019 underlying EBITA at constant currencies to be broadly stable compared with the record performance that was posted for the previous financial year.
Consequently, the German travel company also scrapped its guidance of at least 10% compound annual growth rate (CAGR) in underlying EBITA at constant currencies for the three years to financial year 2020.
In a statement, the group cited the negative impact from the extraordinarily hot weather in 2018, which resulted in later bookings, along with overcapacity in certain destinations, such as the Canaries.
But TUI mostly blamed the continued weakness of the pound sterling, which makes it difficult to improve margins on holidays sold to UK customers.
TUI shares are currently in a spin, down 17% on the London Stock Exchange after this warning. The company will report its first-quarter results on Tuesday 12 February.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
TUI now expects full-year 2019 underlying EBITA at constant currencies to be broadly stable compared with the record performance that was posted for the previous financial year.
Consequently, the German travel company also scrapped its guidance of at least 10% compound annual growth rate (CAGR) in underlying EBITA at constant currencies for the three years to financial year 2020.
In a statement, the group cited the negative impact from the extraordinarily hot weather in 2018, which resulted in later bookings, along with overcapacity in certain destinations, such as the Canaries.
But TUI mostly blamed the continued weakness of the pound sterling, which makes it difficult to improve margins on holidays sold to UK customers.
TUI shares are currently in a spin, down 17% on the London Stock Exchange after this warning. The company will report its first-quarter results on Tuesday 12 February.
Copyright (c) 2019 CercleFinance.com. All rights reserved.