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TUI: market not convinced by trading update

(CercleFinance.com) - TUI is only just afloat in London on Tuesday, after the tourism group's trading update as it approaches the end of its 2019/2020 fiscal year, when the group announced a seemingly tricky cash position.


In morning trading, the share was up nearly 1%, although this has no where near offset its collapse of over 70% YTD.

In a statement released on Tuesday morning, TUI said that it only sold 15% of its initial summer program because of the many cancellations received since the beginning of the health crisis from March.

Regarding winter holidays, it has downscaled them to just 40% of its total capacity, compared to 60% previously, to take into account of travel restrictions adopted in Europe since the resurgence of the virus.
More worrying, the group reported cash of around 2 billion euros as of 20 September, compared to 2.4 billion euros a month earlier.

This implies a high cash payout, linked to the refunds of bookings, Oddo BHF analysts say, even though they hope that the cash burn will normalise over the coming months, given the decline in capacity.



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