Interim Results
December 04 2008 - 2:44AM
UK Regulatory
RNS Number : 5344J
Dart Group PLC
04 December 2008
DART GROUP PLC
Interim Results
Dart Group PLC ("the Group"), the aviation and distribution group, announces its interim results for the half year ended 30 September
2008. These results are presented under International Financial Reporting Standards (IFRS).
Highlights
* Turnover up 8% to �272.8 million (2007: �252.9m)
* Pre-tax profits up 97% to �36.3m (2007: �18.4m)
* Underlying pre-tax profits up 175% to �33.5m (2007: �12.2m)
* Aviation load factors increased to 80.4% (2007:74.0%)
* �20.3m cash generated from operating activities (2007: �0.5m outflow)
Chairman's Statement
I am pleased to report on the Group's trading for the six months ended 30 September 2008. The Group delivered a profit before tax of
�36.3m, an increase of 97% on last year (2007: �18.4m).
On an underlying basis (excluding the Specific IAS39 mark to market adjustments), profit before tax amounted to �33.5m (2007: �12.2m).
This significant improvement in trading performance was principally driven by Jet2.com, the Group's low-cost leisure airline, and reflects
both improved yields and load factor. Underlying EBITDA increased by 77% to �52.7m (2007: �29.9m).
Net cash flow from operating activities of �20.3m was generated in the period (2007: �0.5m outflow), despite the seasonal reduction in
the level of customer advance payments, which peaked in March. Capital expenditure in the first half amounted to �9.5m (2007: �16.0m)
primarily relating to the overhaul of the Group's aircraft engines.
Notwithstanding these strong results, the Board has decided, after careful consideration, not to pay an interim dividend, maintaining a
cautious approach in recognition of current economic conditions.
Jet2.com
Jet2.com has focused on its core leisure routes from its bases in the North (Belfast, Blackpool, Edinburgh, Leeds Bradford, Manchester
and Newcastle). The company operates 30 aircraft of which 29 (21 Boeing 737-300s and 8 Boeing 757-200s) are owned by the Group. The 235
seat Boeing 757-200, with its 3,500 nm range, enables us to serve popular Eastern Mediterranean, Red Sea and Canary Island destinations very
cost effectively whilst still offering competitive economics to traditional Western Mediterranean resorts. The performance of this aircraft
is also demonstrated by the operation of a series of direct flights to New York, the first of which took off from Leeds Bradford
International Airport in early November.
We flew 2.3m scheduled passengers in the 6 months to 30 September 2008 (2007: 2.6m) with the number of routes served being reduced
slightly to 74 (2007: 77). We were able to increase both yields and load factors by focusing on flying popular routes, at departure times
convenient to our customers.
Ancillary revenues are continually being developed with gross revenue per passenger increasing to �15.17 during this half year (2007:
�8.60). The introduction of our new in-house developed reservation system in February has enabled us to make it easier for our customers to
purchase extra services such as seat assignment or Jet2Plus, which gives airport lounge access, priority check-in and a pre-ordered meal.
Further enhancements continue to be introduced by our commercial and IT teams. Additionally, travel trade interfaces have been developed to
build significantly the sales distribution channels available to the airline, in contrast to other low-cost operators. This allows easy
access to Jet2.com's seat inventory for travel agents and tour operators, either directly or via third party integration, and has been well
received by the travel trade. Jet2.com has also introduced a loyalty scheme in November, designed to reward our regular travellers. We see
this as the first stage of a considerable cross marketing opportunity with great potential for future development.
Our freight and passenger charter business continues to thrive, making the most of both the enlarged 757 fleet and the passenger and
freight capabilities of our 737 "Quick Change" aircraft. We continue to build our presence in this important market, with charter revenues
growing by 70% in the first half of the year.
Costs were carefully managed in the period. Our fuel efficiency programme is now achieving a 4% improvement in our fuel utilisation. We
have also started to see the full benefit of the maintenance arrangements entered into with Pratt & Whitney for our Boeing 737 engines.
For the winter season, Jet2.com has managed down its overall scheduled capacity reflecting a prudent approach in the current economic
environment. Popular new destinations, including Croatia, Turkey and the Red Sea, have been added for next summer, with increased flying
from Manchester, whilst overall capacity will be maintained at levels similar to those of summer 2008.
Jet2holidays.com, our ATOL protected tour operator, which offers a complete leisure package, was launched in February 2007. This
operation has sold over 25,000 holidays in the half year to September 2008 and it is expected that it will make an increasingly significant
contribution to the airline's passenger numbers over the coming years. We believe that Jet2holidays.com will become a favoured choice for
our leisure customers by meeting our customers' demand for a package holiday from their local airport on Jet2.com scheduled services.
Fowler Welch-Coolchain
The Group's logistics company, Fowler Welch-Coolchain, provides an integrated supply chain solution to supermarkets and their suppliers,
food manufacturers, growers and importers. Services provided from its distribution centres in Spalding (Lincs), Teynham (Kent), Washington
(Tyne & Wear), Stockport (Cheshire) and Portsmouth (Hampshire) include both chilled and ambient storage and distribution together with value
adding and pick to order warehousing operations. The company also has important port operations in Sheerness and Southampton.
Operating margins have been impacted slightly in the first six months of the year, due to a slight downturn in sales, resulting mainly
from the loss of two accounts, which have been more than replaced by business wins during the period, the most notable of these being both
transport and warehousing services on behalf of Tulip Limited, and the addition of store deliveries on behalf of Tesco from our Washington
distribution centre. A new warehouse management system has now been implemented in Spalding and is delivering operational efficiencies and
improved management information to the benefit of the company and its customers. This project will be rolled out throughout the company's
operations in the coming months.
Continued investment in driver training has resulted in improved year on year fuel efficiency, and will be further enhanced by the
re-introduction of a leading vehicle brand, not part of the fleet in recent years. The expanded use of double-decker trailers gives both
operating efficiencies and a positive impact on our carbon footprint. We have also contributed to a major UK retailer's supply chain
efficiencies by storing and delivering product units designed for direct in-store display, enabling cost savings and environmental
sustainability.
In August 2008, 10 acres of additional land adjacent to the Spalding site were secured. This will facilitate further expansion at this
important site, consistent with the Group's approach to provide for future growth; a similar purchase having been made in Teynham in 2001.
The performance of the ambient business, acquired in April 2006, continues to improve; volumes have increased with both organic and new
business growth, and further opportunities for development exist in this sector. In line with expectations, a positive contribution for the
full year is anticipated from this operation.
Fowler Welch-Coolchain is a successful business with considerable growth prospects in both its chilled and ambient warehousing and
distribution sectors. It is well positioned to exploit opportunities arising from the general economic downturn, with substantially all of
its core activities being based around the food industry. The company is well protected from oil price volatility, applying a variable
weekly surcharge to reflect variations in purchase prices.
Outlook
On an underlying basis, we would expect second half trading to be in line with last year. Jet2.com forward booking levels remain
encouraging for the winter and Fowler Welch-Coolchain continues to perform in line with the Board's expectations. We expect a more
challenging trading environment next year and will continue to manage the business cautiously in the light of current economic conditions.
Philip Meeson,
Chairman 4 December 2008
www.dartgroup.co.uk
Enquiries:
Philip Meeson, Chairman Mobile: 07785 258666
Andrew Merrick, Group Finance Director Mobile: 07788 565358
Andy Pedrette, Smith & Williamson Corporate Finance Limited (Tel: 020 7131 4000)
Consolidated Profit and Loss Account (unaudited)
For the half year ended 30 September 2008
Half year to 30 September 2008 Half year to 30
September 2007 Year to 31 March 2008
Before Specific IAS Specific IAS 39 IFRS Before Specific IAS Specific IAS
39 IFRS Before Specific IAS Specific IAS 39 IFRS
39 mark to market mark to market 39 mark to market mark to
market 39 mark to market mark to market
adjustments adjustments adjustments
adjustments adjustments adjustments
Note �m �m �m �m
�m �m �m �m �m
Turnover 3 272.8 - 272.8 252.9
- 252.9 429.3 - 429.3
Net Operating Expenses (237.9) 2.8 (235.1) (238.9)
6.2 (232.7) (425.7) 7.9 (417.8)
Other operating income 1.0 - 1.0 0.2
- 0.2 2.0 - 2.0
Operating Profit 35.9 2.8 38.7 14.2
6.2 20.4 5.6 7.9 13.5
Finance Income 2.4 - 2.4 1.9
- 1.9 2.7 - 2.7
Finance Costs (4.8) - (4.8) (3.9)
- (3.9) (5.7) - (5.7)
(2.4) - (2.4) (2.0)
- (2.0) (3.0) - (3.0)
Net financing costs - - - -
- - 1.3 - 1.3
Profit on disposal of fixed
assets
33.5 2.8 36.3 12.2
6.2 18.4 3.9 7.9 11.8
Profit on ordinary activities before
taxation
Taxation 6 (10.3) (0.8) (11.1) (3.0)
(1.6) (4.6) (0.8) (2.3) (3.1)
Profit for the period 23.2 2.0 25.2 9.2
4.6 13.8 3.1 5.6 8.7
Earnings per share - total 4
- basic 16.39p 17.81p 6.48p
9.78p 2.15p 6.18p
- diluted 16.39p 17.81p 6.44p
9.72p 2.12p 6.13p
Earnings per share * continuing operations
- basic 16.39p 17.81p 6.48p
9.78p 2.15p 6.18p
- diluted 16.39p 17.81p 6.44p
9.72p 2.12p 6.13p
Consolidated Balance Sheet (unaudited)
As at 30 September 2008
30 September 2008 �m 30 September 2007 �m 31 March 2008 �m
Non-current assets
Goodwill 6.8 6.8 6.8
Property, plant and equipment 186.3 184.9 193.4
Derivative financial 6.0 0.3 1.6
instruments
Deferred tax assets 2.4 6.2 2.8
201.5 198.2 204.6
Current assets
Inventories 0.3 0.2 0.3
Trade and other receivables 47.9 42.4 50.0
Derivative financial 6.6 2.6 13.7
instruments
Cash and cash equivalents 0.4 4.1 4.0
55.2 49.3 68.0
Total Assets 256.7 247.5 272.6
Current liabilities
Trade and other payables 118.6 108.9 147.1
Borrowings 7.6 - -
Derivative financial 2.1 11.5 5.9
instruments
128.3 120.4 153.0
Non-current liabilities
Other non current liabilities 6.2 - 2.9
Borrowings - 36.1 21.2
Derivative financial 4.1 8.2 2.5
instruments
Deferred tax 19.9 16.4 18.6
30.2 60.7 45.2
Total Liabilities 158.5 181.1 198.2
Net Assets 98.2 66.4 74.4
Capital and reserves
Called up share capital 1.8 1.8 1.8
Share premium account 9.3 9.3 9.3
Cash flow hedging reserve 8.6 (3.8) 10.0
Profit and loss account 78.4 59.1 53.1
Other reserves 0.1 - 0.2
Total shareholders* equity 98.2 66.4 74.4
Consolidated Cash Flow Statement (unaudited)
For the half year ended 30 September 2008
Six Months ended 30 September Year ended
2008 �m 2007 �m 31 March 2008�m
Cash flows from operating
activities
Profit before taxation from continuing operations 36.3 18.4 11.8
Adjustments for:
Finance income (2.4) (1.9) (2.7)
Finance costs 4.8 3.9 5.7
Profit on disposal of - - (1.3)
property, plant and equipment
Depreciation 16.6 15.6 30.3
Equity settled share based 0.1 0.2 0.2
payments
Fair value adjustments (2.6) (6.2) (7.9)
Operating cash flows before 52.8 30.0 36.1
movements in working capital
Increase in inventories - - (0.1)
Increase / (decrease) in trade and other receivables 2.3 1.6 (6.5)
(Decrease) / increase in trade and other payables (33.9) (29.5) 12.9
Cash generated from operations 21.2 2.1 42.4
Interest received 1.0 - 0.1
Interest paid (2.3) (1.5) (4.4)
Tax received / (paid) 0.4 (1.1) (0.5)
Net Cash generated / (used) from operating 20.3 (0.5) 37.6
activities
Cash flows from investing
activities
Proceeds from sale of property, plant and equipment - 0.1 -
Purchase of property, plant (9.5) (16.0) (38.5)
and equipment
Proceeds from disposal of discontinued operations - - 1.5
Net Cash used in investing (9.5) (15.9) (37.0)
activities
Cash flows from financing
activities
Net proceeds from issue of - 0.1 0.1
share capital
Net (repayments) of proceeds from borrowings (22.0) 18.1 3.2
Equity dividends paid - (2.0) (2.9)
Net Cash (used) / generated from financing (22.0) 16.2 0.4
activities
Effects of exchange rate - 0.4 (0.9)
changes
Net (decrease) / increase in cash and cash (11.2) 0.2 0.1
equivalents
Cash and cash equivalents at beginning of period 4.0 3.9 3.9
Cash and cash equivalents at (7.2) 4.1 4.0
end of period
Consolidated Statement of Changes in Equity (unaudited)
For the half year ended 30 September 2008
ShareCapital Share Premium Cash Flow Hedging Retained Earnings OtherReserves Total Reserves
Reserve
�m �m �m �m �m �m
Balance at 1 April 2007 1.8 9.2 0.9 47.1 - 59.0
Fair value movements on cash - - (6.5) - - (6.5)
flow hedges
Deferred tax relating to cash - - 1.8 - - 1.8
flow hedges
Issue of shares under share - 0.1 - - - 0.1
option scheme
Share based payments - - - 0.2 - 0.2
Profit for the period - - - 13.8 - 13.8
Dividends paid - - - (2.0) - (2.0)
Balance at 30 September 2007 1.8 9.3 (3.8) 59.1 - 66.4
Fair value movements on cash - - 19.5 - - 19.5
flow hedges
Deferred tax relating to cash - - (5.7) - - (5.7)
flow hedges
Currency translation - - - - 0.2 0.2
differences
Loss for the period - - - (5.1) - (5.1)
Dividends paid - - - (0.9) - (0.9)
Balance at 31 March 2008 1.8 9.3 10.0 53.1 0.2 74.4
Fair value movements on cash - - (1.9) - - (1.9)
flow hedges
Deferred tax relating to cash - - 0.5 - - 0.5
flow hedges
Currency translation - - - - (0.1) (0.1)
differences
Issue of shares under share - - - - - -
option scheme
Share based payments - - - 0.1 - 0.1
Profit for the period - - - 25.2 - 25.2
Balance at 30 September 2008 1.8 9.3 8.6 78.4 0.1 98.2
Notes to the consolidated financial statements (continued)
For the half year ended 30 September 2008 (unaudited)
1. General information
The financial statements for Dart Group Plc (the "Group") have been prepared and approved by the Directors in accordance with
International Financial Reporting Standards ("IFRS") as adopted by the European Union ("Adopted IFRS"). The Group's financial statements
consolidate the financial statements of Dart Group PLC and its subsidiaries.
The interim report for the six months ended 30 September 2008 was approved by the Board of Directors on 3 December 2008.
2. Accounting policies
Basis of preparation
The financial statements have been prepared under the historical cost convention, except for all derivative financial instruments which
have been measured at fair value. In addition this interim financial report does not comply with IAS 34, Interim Financial Reporting, which
is not currently required to be applied under AIM rules.
All accounting policies, presentation and methods of computation are consistent with those described in the Group's financial statements
for the year ended 31 March 2008.
The financial information contained in this statement does not constitute the Company's statutory accounts for the year ended 31 March
2008. Those accounts, which were prepared under IFRS, have been reported on by the Company's auditors and delivered to the Registrar of
Companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew
attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 237(2) or (3) of the
Companies Act 1985.
The Group's financial statements are presented in pounds sterling and all values are rounded to the nearest �100,000 except where
indicated otherwise.
3. Segmental information
For management purposes the Group is divided into two main segments, Aviation Services and Distribution. These divisions are the basis
on which the Group reports its primary segmental information in the day-to-day management of the business. The following is an analysis of
the Group's revenue by operating segment. All of the segmental revenue reported is from external customers.
Segmental Revenues Half year to30 Half year to30 Year to31 March 2008 �m
September 2008 �m September 2007 �m
Aviation Services 215.6 194.1 308.8
Distribution 57.2 58.8 120.5
272.8 252.9 429.3
4. Earnings per share
The calculation of earnings per share is based on the following:
Half year to30 Half year to30 Year to31 March2008
September2008 September2007
Profit for the period (�m) 25.2 13.8 8.7
Weighted average number of 141,065,694 141,004,913 141,029,664
ordinary shares in issue
during the period used to
calculate basic earnings per
share
Weighted average number of 141,065,694 141,915,649 143,092,396
ordinary shares in issue
during the period used to
calculate diluted earnings per
share
5. Dividends
No dividends have been paid or proposed during the six month period to 30 September 2008 (2007: �2.0m).
6. Taxation
The tax charge for the period of �11.1 million is calculated by applying an estimated effective tax rate for the year to 31 March 2009
to the profit for the period.
7. Reconciliation of net cash flow to movement in net debt
Half year to30 Half year to30 Year to31 March2008
September2008 �m September2007 �m �m
(Decrease) / increase in cash (11.2) (0.2) 0.1
in the period
Cash (inflow) / outflow from 22.0 (18.1) (3.2)
(increase) / decrease in net
debt in the period
Change in net debt resulting 10.8 (18.3) (3.1)
from cash flows in the period
Other non cash changes (0.8) 0.4 0.1
Net debt at beginning of (17.2) (14.1) (14.2)
period
Net debt at end of period (7.2) (32.0) (17.2)
8. Contingent liabilities
The Group is in litigation in the US against Sutra Inc and Novak Niketic, who provided use of the reservation system operated by
Jet2.com until February 2008, in relation to the termination of the use of this system. An unspecified counterclaim has been lodged which is
being vigorously defended by the Group in respect of which the Directors estimate approximately $2.5m liability in the unlikely event that
the counterclaim is successful.
9. Other matters
This report will be posted on the Company's website, www.dartgroup.co.uk and copies are available from the Company Secretary at the
registered office of the Company, Low Fare Finder House, Leeds Bradford International Airport, Leeds LS19 7TU.
This information is provided by RNS
The company news service from the London Stock Exchange
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