TUI Group expects more than 10 per cent profit growth

TUI Group is the world's largest leisure and tourism company – and it includes the Thomson brand.

In the company's first strategy update since the merger between London-listed TUI Travel and German owner TUI AG, the organisation has announced that it expects to see annual profits grow more than ten per cent over the next three years – that's three per cent ahead of what analysts have predicted.

TUI has also said it is confident about meeting the target for profit growth of up to 15 per cent for this year.

The company has also announced a series of moves to reorganise the business and simplify its structure. This includes retiring the Thomson brand in Britain and selling hotel booking website LateRooms. This, the company said, shows that plans for the enlarged company are moving ahead faster than expected.

Rebranding project

Joint chief executive Fritz Joussen said that the rebranding project to get the group's various tour operator names under the single TUI brand will take up to three years.

"It's not a secret that I'm not a fan of having lots of brands," Mr Joussen said. He added that it could take two years before the Thomson name disappears. Because it's such a well known brand, a careful approach will be needed, he explained.

Long-haul holidays

For its second quarter, the group reported a 17 per cent narrower underlying loss of €167.8 million (£120.92) – this was bolstered by a strong performance in the company's cruise ship business.

TUI has also demonstrated that it is confident in its cruise and long-haul holiday business. The company has announced that it will be ordering two new cruise ships to meet German demand and it is looking to acquire two more Boeing Dreamliner jets.

A good performance in summer trading also helped and gave confidence that it would continue to deliver operating profit growth for the year to September 30th.

By 09:45 (BST), shares in TUI were up 1.8 per cent at £12.76 – this was close to the record high, which was reached earlier this month.