TUI Travel, the largest travel operator in Europe has reported a four per cent rise in revenue for the financial year ended September 30th, as more consumers opt for its package holidays.
Revenue stood at £15.1 billion for the year, while underlying profits jumped 20 per cent to hit a record high of £589 million, according to its annual results.
However, at statutory level, which includes the company’s restructuring costs, pre-tax profits slipped to £181 million, down from £201 million the previous year.
TUI Travel chief executive Peter Long commented: “The year has been outstanding and highlights that our strategy of delivering unique holidays sold directly to our customers is the right one.
“We have once again reported record underlying profits across the business, significantly exceeding the top end of our growth roadmap target of ten per cent.
“This follows strong margins across the peak summer period, particularly in the UK and accelerated business improvement delivery.”
TUI, which operates Thomson, has focused on cutting costs and selling holiday packages directly to customers, with online sales now making up more than a third of total sales.
TUI Travel announced it was increasing its final dividend by 17 per cent to 9.75p a share, which will be paid on April 9th 2014
Long added: “TUI Travel is structurally well positioned with a robust business model that gives us a long term competitive advantage.
“The business continues to deliver sustainable growth through our unique holiday experiences, increasingly distributed online, while leveraging its scale as one organisation.
“This in turn, will drive further value for both our customers and shareholders.
“Building on this year’s outperformance where we have achieved a 13 per cent underlying operating profit growth, I remain confident that we will deliver consistently on our five year annualised growth target of between seven to ten per cent at constant currency.”