Duty-free retailer Avolta sees travel boom boosting results
Sees FY core turnover, margins at top end of mid-term goals
H1 core turnover up 11%
CEO says growth in passengers numbers 'very, very strong'
Rewrites with CEO comments, updates shares
By Anastasiia Kozlova and Ozan Ergenay
July 30 (Reuters) -Swiss duty-free retailer Avolta AVOL.S forecast on Tuesday full-year underlying turnover and profit margins at the top end of its mid-term targets, boosted by strong travel demand.
Shares in the company, which operates more than 5,100 outlets across 73 countries, rose as much as 3% after it reported an 11% rise in first-half core turnover and affirmed its medium-term growth forecasts.
Avolta has benefitted from a rebound in global travel since the pandemic, but its upbeat comments contrast with warnings from some airlines that the post-COVID boom is starting to fade.
"The growth of passengers is still very, very strong," Avolta Chief Executive Xavier Rossinyol told Reuters.
He also said the company expected travel demand in China, which has been held back in part by a faltering economy, would recover to pre-COVID levels.
"Even if it takes time for Avolta, it doesn't change our view that Asia-Pacific is a key region," he added.
JPMorgan analysts, who have an "overweight" rating on Avolta shares, described the company's guidance as "very positive".
For the medium-term, Avolta is targetting core turnover growth at constant exchange rates of 5-7% per year, and an annual improvement in core profit margins of 20-40 basis points.
The company's core turnover in the first half of the year, excluding fuel sales, rose 11% year-on-year to 6.34 billion Swiss francs ($7.15 billion).
Its shares, which have risen over 6% this year, were up 0.2% to 35.3 francs at 1045 GMT.
($1 = 0.8863 Swiss francs)
Reporting by Anastasiia Kozlova and Ozan Ergenay; Editing by Jason Neely and Mark Potter
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