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Dart Group announces Interim Results 2015

Posted in Announcements

November 19, 2015 at 06:57

Dart Group PLC ("the Group")
Interim Results

Dart Group PLC, the Leisure Travel and Distribution & Logistics group, has announced its interim results for 2015.

Group Chairman and Chief Executive Philip Meeson said in a statement:

“I am pleased to report on the Group's trading performance for the half year ended 30 September 2015 in our two businesses, “Leisure Travel” - incorporating Jet2holidays, our ATOL protected package holidays operator and Jet2.com, the North's leading leisure airline - and “Distribution & Logistics”, comprising Fowler Welch, one of the UK's leading logistics providers.

In what has proven to be an exceptional summer season, Group operating profit increased 65% to £147.1m (2014 underlying: £89.4m) and profit before tax by 66% to £146.8m (2014 underlying: £88.7m).

The increase in Group operating profit reflects consistently strong summer trading in our Leisure Travel business coupled with our Distribution & Logistics business performing ahead of last year. However, increased losses are to be expected in the second half of the year as our expanding Leisure Travel business invests in additional aircraft, advertising and people in readiness for the summer 2016 season.

The Group generated increased net cash flow from operating activities of £199.8m (2014: £93.2m), reflecting the improved Leisure Travel trading performance. Total capital expenditure of £60.9m (2014: £25.5m) included the purchase of one Boeing 737-800, pre-delivery payments for new aircraft, the majority of which have been financed, deposits for new aircraft and continued investment in the long-term maintenance of our aircraft fleet.

Cash and money market deposits increased by £144.0m in the half (2014: £68.1m), resulting in total cash held at the reporting date of £446.8m (2014: £331.8m), which included advance payments from Leisure Travel customers of £183.7m (2014: £145.0m).

Basic earnings per share increased to 79.82p from an underlying 48.25p in 2014. In view of the outlook for the full year, the Board has decided to pay an increased interim dividend of 0.90p per share (2014: 0.75p). The dividend will be paid on 1 February 2016 to shareholders on the register at 4 January 2016”

Leisure Travel

The Group’s Leisure Travel business specialises in the provision of ATOL licensed package holidays by its tour operator Jet2holidays and scheduled leisure flights by its airline Jet2.com, to high volume leisure destinations in the Mediterranean, the Canary Islands and to European Leisure Cities.

Leisure Travel revenue grew by 15% to £951.7m (2014: £824.1m) at an operating profit margin of 15% (2014 underlying: 11%), resulting in operating profit growth of 64% to £143.6m (2014 underlying: £87.8m).

Summer 2015 trading has been strong with demand for our package holidays continuing to grow as Jet2holidays took 0.94m (2014: 0.77m) customers on holiday, an increase of 22%, representing 42% (2014: 33%) of overall flown customers. Our important flight-only product was enjoyed by 2.65m passengers in the period (2014: 3.07m). All of our customers flew with Jet2.com, enabling us to provide a seamless holiday experience.

Jet2.com flew a total of 4.53m passengers in the six months to 30 September 2015 (2014: 4.62m), a slight decrease of 2% over the same period last year against a backdrop of careful seat capacity management. As a result of this and buoyant customer demand, the business achieved a record average load factor of 94.1% (2014: 91.8%) alongside a significant increase in average net ticket yield of 16%. The average price of a package holiday grew 5%.

Non-ticket revenue per passenger grew 4% to £32.55 (2014: £31.35). We continue to optimise this revenue stream through our customer contact programme, which focusses on pre-departure online sales of hold bags, advanced seat assignment, pre-ordered meals, travel insurance and car hire, and through inflight sales of meals, drinks, snacks, cosmetics, perfumes and duty free products.

The Leisure Travel business expanded its fleet to 59 aircraft for summer 2015 (summer 2014: 55) with commensurate increases in pilots, engineers and cabin crew. We will continue to develop our customer focused flying programme into summer 2016, which will include the addition of two new destinations - Girona and Naples.

Distribution & Logistics

Our distribution business, Fowler Welch, is one of the UK’s leading providers of distribution and logistics services to the food industry supply chain, serving retailers, processors, growers and importers through its distribution network.

The business operates from eight prime UK distribution sites, with major temperature-controlled operations in the key produce growing and importing areas of Spalding in Lincolnshire, Teynham and Paddock Wood in Kent and Hilsea near Portsmouth. Ambient (non-temperature-controlled) consolidation and distribution services are provided at Desborough, Northamptonshire and at Heywood near Bury, Greater Manchester. It also operates two regional distribution sites at Washington, Tyne and Wear and at Newton Abbott, Devon.

Fowler Welch revenue reduced by 7% to £72.3m (2014: £78.1m) primarily due to lower fuel costs which are passed on to customers. However, operating profit increased by £1.9m to £3.5m (2014: £1.6m), as operating margins improved by 2.8ppts to 4.8%.

Fowler Welch and its partner have continued to develop their joint venture operation, Integrated Service Solutions (“ISS”), which provides a full range of fruit ripening and packing services to the produce sector for locally grown and imported fruits at Fowler Welch’s Teynham facility. Throughput and revenue are increasing as the mix of product and the productivity of the various packing lines improves.

Outlook

With winter 2015/16 Leisure Travel bookings continuing to perform in line with expectations and notwithstanding the important post-Christmas booking period that is still to come, the Board is optimistic that current market expectations for the full year will be achieved.

To read the full report click here.

For further information please contact:

Dart Group PLC
Philip Meeson, Group Chairman and Chief Executive
Gary Brown, Group Chief Financial Officer
Tel: 0113 239 7817

Smith & Williamson Corporate Finance Limited
Nominated Adviser

David Jones
Tel: 020 7131 4000

Canaccord Genuity - Joint Broker
Guy Marks / Mark Whitmore
Tel: 020 7523 8000

Arden Partners - Joint Broker
Christopher Hardie
Tel: 020 7614 5900

Buchanan - Financial PR
Richard Oldworth
Tel: 020 7466 5000