Interactive Investor

ii view: recovery halted at holiday company TUI

21st May 2021 15:44

Keith Bowman from interactive investor

Cost reduction remains in focus, but outlook uncertainty remains high. We assess prospects. 

First-half results to 31 March

  • Revenues down 89% to €716 billion
  • Loss of €1.5 billion, up from a loss of €815 million
  • Liquidity as at 7 May 2021 of €1.7 billion
  • Net debt up by 39% to €6.8 billion

ii round-up:

TUI (LSE:TUI) is a Germany- headquartered integrated holiday company.

Its operations include 1,600 travel agencies and a collection of online booking portals.

It also operates five airlines with around 150 aircraft, over 400 hotels and 15 cruise liners.

For a round-up of these latest results, please click here.  

ii view:

With so many factors outside of management’s control potentially influencing performance such as terrorism, fuel prices, currency movements, the holiday business can be a volatile and high-risk industry in which to invest. The global pandemic of 2020 has tested the tourism industry and TUI beyond anything suffered previously. 

For investors, the group’s ongoing focus on cost reduction offers reassurance. It remains on track to achieve its cost savings target of €400 million per annum by the full-year 2023. A third support package of €1.8 billion and a sale of €400 million in convertible bonds suggest a continued ability to raise funds, while a pipeline of 2.6 million customers highlights demand for travel. 

But the high degree of outlook uncertainty still leaves management unable to offer guidance or estimates for the current full-year 2021. Summer bookings are now down 69% versus a 2019 comparison, which compares to down 60% as of its March update. And net debt is up 39% year-over-year to €6.8 billion. In all, and with analysts’ fair value estimate of 310p currently below the prevailing price, the shares appear to be up with events.


  • Diversified asset portfolio
  • Pursuing a reduced cost base


  • Elevated debt
  • Significant uncertainty regarding the outlook

The average rating of stock market analysts:


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