Carnival making bigger splash

CRUISE bookings have bounced back after falling a year ago on fears over the invasion of Iraq.

Luxury cruise group Carnival, which owns Britain's P&O Princess, says bookings are up 33% in the last six weeks compared to the same period last year.

Far from being the preserve of wealthy Americans, Carnival says cruising is starting to appeal to younger people, especially in Europe. Popular destinations remain the Caribbean and Alaska, far away from terrorist troublespots.

Since completing its £3.5bn takeover of P&O in April, Carnival is still on track to reap the forecast £57m of merger benefits.

Annual net income was £676m, up from £579m. Profits were boosted by the P&O contribution and an 18% growth in capacity after the introduction of a record seven new ships.

The shares, up 47p to 2217p, have surged 45% since the merger and trade on more than 18 times earnings.

Broker JP Morgan keeps its 'overweight' recommendation but thinks expectations for the group are too high.