By Joanna Plucinska and Ilona Wissenbach
LONDON (Reuters) -TUI's shareholders voted on Tuesday to remove Europe's largest travel operator from the London Stock Exchange in the latest blow to the UK market.
Some 98.35% of votes were cast in favour of the delisting and just 1.65% against, after the company reported better-than-expected quarterly results on the back of robust travel demand.
Hanover-headquartered TUI (LON:TUIT) has said having a single German listing will better reflect its ownership and trading patterns.
The first quarter results initially sent the company's shares higher in Frankfurt and London, but they later fell back.
TUI's departure is the latest blow to the London market after Britain's biggest chip company ARM floated in New York last year, and building supplies firm CRH (LON:CRH) and plumbing equipment company Ferguson shifted their main listings to the U.S.
"I think it's a retrograde step when a successful long standing heritage brand in travel moves away from a market like the UK where it has such a vested interest in terms of its high revenues from UK consumers," said Paul Charles, founder of the PC travel agency.
TUI's London and Frankfurt listings resulted from the combination of Germany's TUI with Britain's First Choice Holidays in 2007.
STRONGER LOW SEASON
TUI reported an operating profit of 6 million euros ($6.5 million) in the three months to the end of December, versus a loss of 153 million in the year-earlier period and analysts' forecast for a loss of 102 million euros in an LSEG poll.
Europe's airlines are entering 2024 with robust outlooks as travel demand is expected to surpass pre-pandemic levels despite economic uncertainty, delays in plane deliveries from manufacturers and rising jet fuel prices.
TUI's first-quarter beat is a positive signal for the airline sector as a whole, an investor in other airlines, who did not wish to be named, said.
The first half of TUI's fiscal year is usually weak with the bulk of annual profit coming from the April to September summer season.
"These updates highlight the strength of demand for holidays at present," Dudley Shanley, an analyst at Goodbody, said in a note. "This summer should be very strong for ... the European airlines."
TUI's shares jumped more than 7% in early trade in Frankfurt but ended little changed. The Frankfurt shares have dropped around a fifth since the start of 2023.
The "share performance was and is clearly unsatisfactory", Chief Financial Officer Mathias Kiep told shareholders at the company's annual meeting on Tuesday.
TUI maintained its forecast for a 25% increase in operating profit in the year to the end of September, and also set a medium-term target for a compound annual growth rate of 7%-10%.
Deliveries of Boeing (NYSE:BA) MAX 737 10 planes are expected to be delayed but MAX 737 8 planes on order should arrive on time, CEO Sebastian Ebel said on the call, adding some leasing deals had been extended to ensure capacity.
($1 = 0.9289 euros)