By Carla Mozee, MarketWatch
LONDON (MarketWatch) — TUI Travel PLC cruised higher Thursday, nearly topping the FTSE 100 benchmark, after its majority shareholder issued an upbeat profit outlook.
TUI Travel shares climbed 2.2% after German-listed TUI AG /zigman2/quotes/206714402/delayed DE:TUI1 +2.58% said growth in full-year earnings before interest, taxes and amortization should come in “at least at the upper end” of its forecast. Growth for underlying profit is being targeted at 6% to 12%.
TUI AG said growth at TUI Travel’s hotels & resorts and cruises segments and strength in the key German and U.K. markets contributed to an 89% rise in group underlying profit to 163 million euros ($218.33 million) in the third quarter. TUI Travel in June agreed to merge with TUI AG, its biggest shareholder, in an all-stock deal that TUI AG said remains on track.
Shares of cruise operator Carnival PLC /zigman2/quotes/210414141/delayed UK:CCL +4.53% also rose, by 0.4%.
The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.34% gained 0.4% to 6,685.26 after a flat start to the session. The benchmark added 0.4% on Wednesday, boosted by fading prospects of an early interest-rate increase by the Bank of England.
On Thursday, a ratings upgrade for British Land Co. /zigman2/quotes/210491538/delayed UK:BLND -0.77% to buy at Bank of America Merrill Lynch pushed shares of the property investment firm 2.5% higher.
But shares of Glencore PLC /zigman2/quotes/201400686/delayed UK:GLEN -0.94% fell 1.3% following a downgrade to neutral from outperform at Credit Suisse, which cited fading momentum and valuation as reason for the move.
On the FTSE 250 index, shares in Carillion PLC /zigman2/quotes/208402800/delayed UK:CLLN -28.95% jumped 8.4% after the construction and support services firm laid out its business plan for a merger with Balfour Beatty /zigman2/quotes/202863772/delayed UK:BBY +0.27% , signaling it is still pursuing the deal. Shares in Balfour Beatty rose 1.5%.
Carillion has now outlined “a credible road map on the merger and how it would achieve the £175 million reduction in the cost base and the associated costs. Balfour Beatty’s board talks about a series of theoretical cost reduction opportunities,” said Investec Securities analyst Andrew Gibb in a note to clients Thursday.
“A standalone Balfour Beatty does not look attractive, the Carillion deal does,” he wrote.
In the currency market, the pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.0157% bought $1.6691, down from $1.6695 late Wednesday.