Shares in Tui, Europe’s biggest tourism group, were the best performers among German blue chips on Wednesday, thanks to forecast-beating results for the year to December.

Michael Frenzel, chief executive, said operating profits doubled to €489.5m ($640.7m). For 2005, profits from its core holidays business accounting for nearly 60 per cent of the group total should grow at a double-digit percentage rate, though shipping growth would be more modest.

There had been a 7 per cent increase in bookings and holidaymaker numbers so far in 2005, compared with the 1 per cent increase in holidaymakers, to 18.4m, in 2004, Mr Frenzel said. The performance marks a turnround in fortunes for the group, which had suffered from a shrinkage in the tourism market after 9/11, compounded by a stagnant shipping market.

Until the end of last year, there had also been uncertainty among shareholders. Short-selling hedge funds ambushed the group last summer, betting on an eviction from the blue chip Dax30 index.

But since WestLB, the group’s main shareholder offloaded its 31 per cent stake in December, removing a long-standing overhang, the share price has rocketed from €16.50 to yesterday’s close of €21.58, up 3.3 per cent on the day. Tui would complete the sales of non-core industrial assets this year, Mr Frenzl said. The VTG rail logistics business would be divested in the first half, while the group’s US steel trading unit would be sold by end of year. Tui emerged rebranded from Preussag three years ago and had planned to focus exclusively on tourism. But last year it opted to hold on to shipping business Hapag Lloyd, after seeing scant demand for the proposed initial public offering.

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