RE: Half year report10 May 2023 11:43
Before any one shoots me , I am an investor in Tui as many on here are and want the sp to surge as we all do. Covid restrictions gone , no barriers to travel , people are wanting to go abroad and although Tuis capacities has increased this report is not as upbeat as I thought. Yes we have a cost of living crisis but I don't think this will significantly stop people going on holiday. In my opinion the one main reason the sp isn't surging is still the debt level. Yes some have pointed out that debt levels may be down to pre covid levels and they maybe but it is the servicing of the debt which is the big problem , the cost of which is badly restricting any profit growth. Servicng that debt could be up to 16X what it was pre covid for any unfixed debt rates. A massive , massive increase badly eating into profits. Interest rates pre covid had been very , very low for a long time initiated by the financial crisis and debt built up by Tui during this period of low rates ( which as a consequence was a good time to build up debt ) was easily managed. That has now changed for the worse , for how long we don't know and until interest rates significantly reduce will be a major problem for Tui. What is going to significantly push up the sp as things are at the moment? The only thing that can is people going on holiday with Tui , more so than pre covid and also increased prices. I don't see firm evidence of that in this report to. I don't see major strides forward with the sp until interest rates significantly reduce and there is no signs of that untill next year at the earliest. Massively increased earnings will help but I don't see that coming from this report. Dividends are highly unlikely for the foreseeable. None of us want it but If high interest rates persist then I can quite easily see another Ri next year to reduce debt and make servicing of it easier. Tui have never stated definitively that there will be no more Ris ( no company can ) so don't rule it out. Lets hope there wont be but we can only wait and see