19 December 2012 Last updated at 04:48 ET

Tui Travel boosts owner's profits

Tui Travel, which owns Thomson and First Choice, saw a jump in operating profits

German travel company Tui has reported a sharp rise in annual profits, thanks to the improved performance of subsidiary Tui Travel and the group's hotels and resorts business.

Net profit for the 2011-12 financial year was 141.9m euros ($187.8m; £115.4m), up 20% on a year earlier, while revenue rose 5% to 18.3bn euros.

Tui said it was upbeat about 2013, expecting a "slight increase" in sales.

It added that debt reductions meant the company was "virtually debt free".

'Record results'

"Our business model has proven to be stable and sustainable despite a challenging economic framework in our key source markets in Europe," said chief executive Michael Frenzel.

"Tui is outperforming the market. Thanks to our product strategy and our efficient capacity control, we have delivered record operating results."

He added that net debt had been reduced by 639m euros to 178m euros.

Tui Travel, which owns Thomson and First Choice, saw revenue rise by 5%, with operating profits up almost 30% at 637m euros.

Tui's hotels and resorts business saw revenue rise 6%, while operating profits were up by almost a quarter at 179m euros.

Tui's cruise division also saw revenue rise, but operating profits fell sharply due in part to efforts to expand its fleet.