Travel giant Tui is considering plans to cancel its listing on the London Stock Exchange, dealing a fresh blow to the city as ministers fight to revive its reputation as a financial centre.
Europe’s largest travel operator said it was exploring the move after shareholders raised questions about whether the dual listing structure on the London and Frankfurt Stock Exchanges was “optimal and advantageous”.
Increased scrutiny from investors led Tui to propose a vote at its annual general meeting in February that would determine whether the company moves to a single listing in Germany.
Tui has been listed on both stock exchanges since 2014, when it merged with German-based Tui AG, the largest shareholder of UK-based Tui Travel, known for its Thomson and First Choice travel agencies.
This merger created one of the world’s largest tourism businesses, comprising more than 400 hotels, 16 cruise ships, 1,200 travel agencies and five airlines.
The company’s potential departure from the Square Mile would raise fresh concerns about its ability to retain and attract companies, especially after a series of high-profile exits.
These include building materials company CRH and plumbing equipment supplier Ferguson, which has shifted its listings to New York.
Ministers are trying to cut red tape to make London a more attractive place to list.
But Tui bosses said they had seen a significant shift in share ownership from the UK to Germany in the last four years.
Mathias Kiep, Tui’s chief financial officer, said around 75 per cent of Tui shares “are currently held in Germany or on the German register”, adding: “There were comments during our roadshow where people asked me why you have this listing structure. Why liquidity? “Not pooled into a single exchange? That would be better for us as investors, and we encourage you to consider whether there is a better index out there.”
Tui withdrew from the FTSE 100 in early 2020 after the pandemic caused its shares to collapse. Despite the return of travel demand, it is still trading around 80 percent lower than in late 2019.
On Wednesday, the company said it returned to profit in its latest financial year to the end of September, following a record earnings report.
The group reported pre-tax earnings of €551.2m (£471.9m) for the year to September 30, against a loss of €145.9m in 2022.
Underlying earnings are expected to rise by at least 25 percent in the new financial year, while sales are expected to rise by 10 percent.
Mr Kiep said there were benefits to being fully based in Europe as it made post-Brexit operations easier.
But CEO Sebastian Ebel stressed that leaving London was not a political decision: “It might just make the structure easier.”
He said that British tourists still constitute the most important market for us.
Tui’s brand has been a cornerstone of many British high streets for years, particularly through Thomson travel agents, whose history dates back 50 years before the brand was phased out in 2015 as part of an effort to consolidate brands under the Tui umbrella.
The complex dual listing structure results from the 2014 merger of Tui’s German business Tui AG and its London-listed Tui Travel business.
At the time, Tui AG owned a majority stake in Tui Travel and helped create the business through the merger of its travel arm and Britain’s First Choice.
Tui management is expected to consider the possible roster change over the next few weeks before a final decision is made in February.
If approved, the listing change could allow Tui to move to a premium standard listing on Frankfurt’s MDax index.
Ivor Jones, an analyst at Peel Hunt, said the switch could be beneficial: “It would probably be more relevant to more investors if it became a member of the MDax index.”
But he said this comes at a time of growing concern about the health of the British stock market, where the number of listed companies is falling.
In a research note published on Wednesday, Peel Hunt highlighted a number of issues holding back the City.
The broker’s head of research, Charles Hall, said Britain did not have enough investment reserves to help listed companies grow.
This, he said, was due to the continued withdrawal of UK pension and insurance funds from British shares.
According to the Office for National Statistics, in 1992 UK pension funds held 32.4 percent of British shares. In 2022, this rate reached a record low of 1.6 percent.
Mr Hall said: “The influx of investment over the past few years means there is a dearth of funds available to support IPOs (only one of which has been notable so far this year) and growth companies that are already listed.”
The result, he said, was lower company valuations, meaning British companies were increasingly likely to be acquired: “This has made the UK a happy hunting ground for both corporate and financial buyers.”