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Foreign holidays boost for TUI Travel

TUI Travel has beaten profit forecasts thanks to strong sales of more expensive holidays in the UK and Germany.

The tour operator, which owns the Thomson and First Choice holiday brands, said it would hit ambitious 2014 targets as people spend more on foreign holidays.

Underlying pretax profit came in at £473 million, ahead of predictions of around £460m, in the 12 months to September 30 this year.

However, on a bottom line basis, pre-tax profits fell 10% to £181m as it was hit by write-downs in its specialist and activity division and embattled French tour operator, which saw annual losses widen to £60m.

Package holiday sales rose 5% in the UK, helped by its focus on more profitable unique holidays targeted at groups including couples and those looking for luxury resorts, such as Sensatori and SplashWorld, which now account for 83% of all departures.

TUI said current trading was "robust" with 60% of its 2013/14 winter holidays already sold, while it added it was pleased with demand for next summer despite strong comparatives.

It has sought to minimise the impact from travel restrictions amid the political unrest in Egypt - traditionally a popular winter destination - by cutting its service to the country, which now accounts for less than 5% of its programme.

Its markets now have Egypt programmes back on sale, but it said customer demand remained lower than a year earlier.

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