TIDMDTG
RNS Number : 2544S
Dart Group PLC
17 November 2011
DART GROUP PLC
Interim Results
Dart Group PLC the Leisure Airline, Package Holidays and
Distribution & Logistics Group (the "Group"), announces its
interim results for the half year ended 30 September 2011. These
results are presented under International Financial Reporting
Standards (IFRS).
Chairman's Statement
I am pleased to report on the performance of the Group's
principal trading companies, Jet2.com, Jet2holidays and Fowler
Welch, for the six months ended 30 September 2011. The Group's
profit before tax was GBP41.6m, an increase of 8% on last year
(2010: GBP38.7m); turnover was up 31% at GBP445.7m (2010:
GBP340.4m). The increase in profitability reflects improved
performance in the Jet2holidays operation. Jet2.com's profit
margins declined as a result of cost increases out-stripping
revenue growth, in particular jet fuel costs, which increased by
24% per tonne. EBITDA decreased by 1% to GBP63.5m (2010:
GBP64.0m).
Net cash flow from operations of GBP10.7m was generated in the
period (2010: GBP31.0m). The reduction over last year reflected, in
part, a lower operating margin within Jet2.com. Total capital
expenditure amounted to GBP10.6m (2010: GBP35.0m). The previous
year included expenditure on the acquisition of a distribution
centre in the North West for Fowler Welch.
The Group had an overall cash inflow of GBP5.1m (2010: outflow
GBP4.2m). Net cash, including money market deposits, at the end of
the period amounted to GBP97.7m, a GBP50.0m improvement on 30
September 2010, with Jet2.com customer advance payments of circa
GBP48m (2010: GBP40m).
Earnings per share has increased to 21.82p from 19.72p. The
Board has decided to pay an increased interim dividend of 0.43p per
share (2010: 0.40p), in line with the increased profit performance.
The dividend will be paid on 27 January 2012 to shareholders on the
register at 30 December 2011.
Leisure Airline
Jet2.com has grown significantly, with capacity up by 29% in the
six months. In total, revenues rose by 27% to GBP316m, as a result
of increased passenger volumes. The company flew 3.2m scheduled
passengers (2010: 2.4m) in the period, an increase of 32%, with the
total number of routes served from all bases rising to 148 (2010:
117). The growth of Jet2holidays accounted for almost a quarter of
the increase in Jet2.com passenger volumes. Load factors were
increased from 87.5% to 89.8%, however net ticket yields decreased
from GBP53.79 to GBP52.63 as a result of the challenging trading
conditions. This, coupled with rising costs - jet fuel in
particular increasing 24% per tonne relative to the same period
last year - and a weaker sterling exchange rate, resulted in a
reduction in Jet2.com's operating margins.
A new base was established in Glasgow for Summer 2011, and
aircraft were also added at Manchester, Newcastle and East
Midlands. The company operates 38 aircraft focusing on its core
high volume leisure routes from eight Northern UK bases (Belfast,
Blackpool, East Midlands, Edinburgh, Glasgow, Leeds Bradford,
Manchester and Newcastle).
Retail revenue per passenger increased 7% to GBP27.87 during the
half year (2010: GBP25.93) through a continued focus on
pre-departure, in-flight and ancillary product sales. We are also
rapidly developing our database driven e-marketing campaigns
targeting customers with relevant retail products prior to
departure.
In total, aircraft charter sales were down 16% in the first half
of the year. Activity reduced in the period as a result of both a
decision not to operate passenger charter flights during our peak
scheduled flying months and the weakness of the charter market in
other months. However, forward charter bookings for the Winter are
encouraging. We fly 18 nightly services for the Royal Mail ensuring
that the first class post arrives on time, in line with demanding
service levels.
For the coming Winter 2011/12, Jet2.com has increased capacity
by 15%, with growth driven by the first Winter of services from
Glasgow, plus increased frequency on leisure city routes from
Manchester including Budapest and Prague. Additional services to
the Canary Islands will fuel the continued growth of Jet2holidays
as customers continue to seek alternative winter sun destinations
to Egypt.
Looking forward to Summer 2012 we plan to grow capacity by
around 12% (Summer 2011: 29%) with a third aircraft based in
Glasgow, following the successful introduction of services this
summer, in addition to new services and additional capacity at
other bases to support the growth of Jet2holidays. We have recently
added Berlin, Istanbul and Pula in Croatia to the leisure
destinations to be served next Summer.
Package Holidays
Jet2holidays, our ATOL protected tour operator, carried over
158,000 customers on package holidays in the half year to 30
September 2011 (2010: 71,300). Revenue increased by 146% to
GBP83.3m (2010: GBP33.8m). This very considerable growth reflects
our focused development of the package holiday product,
improvements to the Jet2holidays.com website and our ability to
offer great value holidays ideally suited to the current difficult
economic environment. We offer holiday packages encompassing
flights, transfers and accommodation ranging from budget self
catering to five star luxury hotels, with all inclusive packages
being particularly popular. A separate "Indulgent Escapes" brochure
has been launched for Winter 2011/12 onwards focusing on luxury
properties.
Jet2holidays has improved gross margins through the full
implementation of its margin management system, which enables a
very flexible and dynamic approach to the pricing of holidays. We
have increased Holidays retail revenues by adding to the retail
products sold through the Jet2holidays booking process, so our
customers can start their holiday with an in-flight meal or an
extra leg-room seat. We are continually developing the
Jet2holidays.com website in order to make the online booking
process easier and to increase the conversion of enquiries into
sales. Travel agency distribution remains an important part of the
overall sales mix, with circa 40% of sales being delivered through
that channel via a range of national, regional and local
agencies.
The Summer 2012 product range sees a significant expansion in
the number of beach hotels. We have a team of hotel contractors
with almost 90% of total holiday sales now being made to a hotel
with which we have developed a direct relationship. We are also
further developing the city product to provide a range of packaged
city breaks across the Jet2.com network. Growth in airline capacity
is focussed on developing Jet2holidays, with new routes and
additional capacity being concentrated on key Holidays
destinations.
Distribution & Logistics
The Group's logistics company, Fowler Welch, provides an
integrated supply chain solution for retailers, food manufacturers,
growers and importers. Services from distribution centres in
Spalding (Lincolnshire), Teynham (Kent), Washington (Tyne &
Wear), Heywood (Greater Manchester) and Portsmouth (Hampshire)
include both chilled and ambient storage and distribution, together
with value adding pick-to-order warehousing operations. Other
operations are focussed around imports through our Dutch hub;
container logistics in Alconbury (Cambridgeshire) and Sheerness
(Kent); and transport and logistics solutions for customers in
Desborough, Slough, Avonmouth and Newton Abbot. Overall revenues
are up 5% year on year, despite a planned reduction in container
activity, with strong growth in Washington (Tyne & Wear), the
Netherlands and the South Coast. Operating margins are below last
year principally as a result of further investment in the growth of
the Fowler Welch network and operating infrastructure.
Having rationalised the Company's container operations with the
closure of the Felixstowe site at the end of the last financial
year, these are now centred on our Alconbury facility. This unit is
now contributing positively as well as retaining this key service
offering for our customers.
The Distribution business is in a strong position to capitalise
on its significant pipeline of Ambient sales opportunities. In May
2010, the Group completed the purchase of a 500,000 sq. ft, 50,000
pallet, freehold distribution centre in Heywood, Greater Manchester
"the Hub" which is now operating at break-even and offers
significant potential for further growth.
In June 2011, a distribution centre was opened in Newton Abbot,
Devon, initially dedicated to serving Tesco Express stores, similar
to our operations in Washington, Tyne and Wear. This was
implemented on time and within budget. The company intends to build
further its business in the South West over the coming months.
The Distribution & Logistics business is very dependent on
IT and we devote considerable resources to the development of IT
systems and infrastructure. The next stage of the systems evolution
has started with the successful implementation of phase one of a
new Transport Management System at Heywood, ahead of its roll out
across the whole transport network in 2012. This will provide the
company with far greater visibility of resources and volumes.
Whilst the marketplace remains extremely competitive and price
focussed, the outlook for Fowler Welch is encouraging. The
company's commitment to operational excellence, its national
network coverage, and its growing presence in the ambient arena
positions it well for future growth.
Outlook
Performance in the first six-month trading period has been
challenging in what has been a difficult retail trading
environment. The Board still hopes that full year results will be
in line with market expectations.
Jet2.com and Jet2holidays forward booking levels are encouraging
for next summer and there is a significant new business pipeline at
Fowler Welch. However, in this challenging trading environment we
expect limited opportunities to deliver profit growth in the short
term.
Philip Meeson
Chairman 17 November 2011
www.dartgroup.co.uk
Enquiries:
Philip Meeson, Chairman Mobile: 07785 258666
Andrew Merrick, Group Finance Director Mobile: 07788 565358
Andy Pedrette / Siobhan Sergeant,
Smith & Williamson Corporate Finance
Limited 020 7131 4000
Dart Group PLC
Consolidated Group Income Statement (unaudited)
For the half year ended 30 September 2011
Half year Half year Year ended
ended ended 30 31 March
30 September September 2011
2011 2010 Unaudited Audited
Unaudited
Continuing operations Note GBPm GBPm GBPm
-------------- ---------------- ------------
Turnover 4 445.7 340.4 542.9
Net operating expenses (403.4) (301.5) (516.0)
Operating profit 42.3 38.9 26.9
Finance income 0.2 1.2 1.3
Finance costs (0.9) (1.4) (2.0)
-------------- ---------------- ------------
Net financing costs (0.7) (0.2) (0.7)
Profit on disposal of fixed - - -
assets
Profit before taxation 41.6 38.7 26.2
Taxation 7 (10.5) (10.7) (8.9)
-------------- ---------------- ------------
Profit for the period (all
attributable to equity shareholders
of the parent company) 31.1 28.0 17.3
Earnings per share 5
- basic 21.82p 19.72p 12.20p
- diluted 21.11p 18.87p 11.68p
Dart Group PLC
Consolidated Group Statement of Comprehensive Income
(unaudited)
For the half year ended 30 September 2011
Half year Half year Year ended
ended ended 31 March
30 September 30 September 2011
2011 2010 Audited
Unaudited Unaudited GBPm
GBPm GBPm
Profit for the period attributable
to equity holders of the
parent company 31.1 28.0 17.3
Effective portion of changes
in fair value movements in
cash flow hedges (27.0) (21.5) 23.0
Net change in fair value
of effective cash flow hedges
transferred to profit - - (1.8)
Taxation on components of
other comprehensive income 7.0 6.0 (5.2)
-------------- -------------- -----------
Other comprehensive income
& expense for the period,
net of taxation (20.0) (15.5) 16.0
Total comprehensive income
for the period attributable
to equity holders of the
parent company 11.1 12.5 33.3
============== ============== ===========
Dart Group PLC
Consolidated Group Balance Sheet (unaudited)
As at 30 September 2011
30 September 30 September 31 March
2011 2010 2011
Unaudited Unaudited Audited
GBPm GBPm GBPm
Non-current assets
Goodwill 6.8 7.0 6.8
Property, plant and
equipment 211.6 201.3 222.2
Derivative financial
instruments 4.9 1.2 19.7
223.3 209.5 248.7
------------- ------------- ---------
Current assets
Inventories 0.7 0.4 0.8
Trade and other receivables 76.0 68.9 74.1
Derivative financial
instruments 15.7 6.3 39.7
Money market deposits 4.0 - 8.5
Cash and cash equivalents 103.4 48.0 98.3
199.8 123.6 221.4
------------- ------------- ---------
Total assets 423.1 333.1 470.1
------------- ------------- ---------
Current liabilities
Trade and other payables 114.1 101.4 62.8
Deferred revenue 88.1 61.3 177.1
Borrowings 0.8 0.3 0.7
Provisions 3.0 0.3 3.9
Derivative financial
instruments 8.2 12.0 24.7
214.2 175.3 269.2
------------- ------------- ---------
Non-current liabilities
Other non-current liabilities 9.0 8.6 9.9
Borrowings 8.9 - 8.7
Derivative financial
instruments 4.5 4.0 -
Deferred tax liabilities 27.2 16.8 34.4
------------- ------------- ---------
49.6 29.4 53.0
------------- ------------- ---------
Total liabilities 263.8 204.7 322.2
Net assets 159.3 128.4 147.9
============= ============= =========
Shareholders' equity
Share capital 1.8 1.8 1.8
Share premium 9.7 9.5 9.6
Cash flow hedging reserve 5.6 (5.9) 25.6
Retained earnings 142.2 123.0 110.9
---------
Total shareholders'
equity 159.3 128.4 147.9
============= ============= =========
Dart Group PLC
Consolidated Group Cash Flow Statement (unaudited)
For the half year ended 30 September 2011
Half year Half year Year ended
ended ended 30 31 March
30 September September 2010
2011 2010 Audited
Unaudited Unaudited GBPm
GBPm GBPm
Cash flows from operating
activities
Profit on ordinary activities
before taxation 41.6 38.7 26.2
Adjustments for:
Finance income (0.2) (1.2) (1.3)
Finance costs 0.9 1.4 2.0
Depreciation 21.2 25.1 37.1
Impairment of goodwill - - 0.2
Equity settled share based
payments 0.2 0.2 0.4
Net financial derivative close
out costs - (1.8) (1.8)
Operating cash flows before
movements in working capital 63.7 62.4 62.8
Decrease / (increase) in inventories 0.1 (0.1) (0.5)
Increase in trade and other
receivables (1.9) (3.1) (7.3)
Increase in trade and other
payables 41.3 32.7 6.7
(Decrease) / increase in deferred
revenue (89.0) (60.3) 55.7
(Decrease) / increase in provisions (0.9) 0.3 1.2
Cash generated from operations 13.3 31.9 118.6
Interest received 0.2 - 0.1
Interest paid (0.9) (0.5) (1.6)
Income taxes paid (1.9) (0.4) (3.3)
Net cash from operating activities 10.7 31.0 113.8
-------------- ----------- -----------
Cash flows from investing
activities
Purchase of property, plant
and equipment (10.6) (35.0) (68.0)
Proceeds from sale of property,
plant and equipment - - 0.1
Net decrease / (increase)
in money market deposits 4.5 - (8.5)
Net cash used in investing
activities (6.1) (35.0) (76.4)
-------------- ----------- -----------
Cash flows from financing
activities
Repayment of borrowings (0.3) (0.3) (0.6)
New loans advanced 0.7 - 9.4
Proceeds on issue of shares 0.1 0.2 0.3
Equity dividends paid - - (1.6)
Net cash from / (used in)
financing activities 0.5 (0.1) 7.5
-------------- ----------- -----------
Effect of foreign exchange
rate changes - (0.1) 1.2
Net increase / (decrease)
in cash in the period 5.1 (4.2) 46.1
Cash and cash equivalents
at beginning of period 98.3 52.2 52.2
Cash and cash equivalents
at end of period 103.4 48.0 98.3
============== =========== ===========
Dart Group PLC
Consolidated Group Statement of Changes in Equity
(unaudited)
For the half year ended 30 September 2011
Share Share Cash flow Retained Total
capital premium hedging earnings reserves
reserve
GBPm GBPm GBPm GBPm GBPm
--------- --------- ---------- ---------- ----------
Balance at 1 April
2010 1.8 9.3 9.6 94.8 115.5
Total comprehensive
income for the period - - (15.5) 28.0 12.5
Share based payments - - - 0.2 0.2
Issue of share capital - 0.2 - - 0.2
Balance at 30 September
2010 1.8 9.5 (5.9) 123.0 128.4
Total comprehensive
income for the period - - 31.5 (10.7) 20.8
Dividends paid in
the period - - - (1.6) (1.6)
Share based payments - - - 0.2 0.2
Issue of share capital - 0.1 - - 0.1
Balance at 31 March
2011 1.8 9.6 25.6 110.9 147.9
Total comprehensive
income for the period - - (20.0) 31.1 11.1
Share based payments - - - 0.2 0.2
Issue of share capital - 0.1 - - 0.1
Balance at 30 September
2011 1.8 9.7 5.6 142.2 159.3
========= ========= ========== ========== ==========
Dart Group PLC
Notes to the consolidated financial statements
For the half year ended 30 September 2011 (unaudited)
1. General information
The accounts 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 accounts consolidate the
accounts of Dart Group PLC and its subsidiaries.
This interim financial report does not comply with IAS 34
"Interim Financial Reporting", which is not currently required to
be applied by AIM companies.
The interim report for the six months ended 30 September 2011
was approved by the Board of Directors on 16 November 2011.
2. Accounting policies
Basis of preparation of the interim report
The unaudited consolidated interim financial report for the six
months ended 30 September 2011 does not constitute statutory
accounts as defined in s435 of the Companies Act 2006. The accounts
for the year ended 31 March 2011 were prepared under IFRS and have
been delivered to the Register of Companies. The report of the
auditor on those accounts was unqualified, did not contain an
emphasis of matter paragraph and did not contain any statement
under s495(2) nor (3) of the Companies Act 2006. In this report,
the comparative figures for the year ended 31 March 2011 have been
audited. The comparative figures for the period ended 30 September
2010 are unaudited.
The financial statements have been prepared under the historical
cost convention except for all derivative financial instruments
that have been measured at fair value and disposal groups held for
sale that have been measured at the lower of fair value, less costs
to sell, and their carrying amounts prior to the decision to treat
them as held for sale.
The Group uses forward foreign currency contracts, currency
option products and aviation fuel swaps to hedge exposure to
foreign exchange rates and aviation fuel price volatility. The
Group also uses forward EU Allowance contracts and forward
Certified Emissions Reduction contracts to hedge exposure to Carbon
Emissions Allowance volatility. Such derivative financial
instruments are stated at fair value.
Ineffectiveness in qualifying cash flow hedges under IAS 39 can
arise as a result of the difference between the contractual profile
of a hedge and the profile of transactions defined as the hedged
item. IAS 39 requires ineffectiveness in qualifying cash flow
hedges to be recorded in the income statement.
The Group's accounts are presented in pounds sterling and all
values are rounded to the nearest GBP100,000 except where indicated
otherwise.
Going Concern
The Directors have prepared financial forecasts for the Group,
comprising operating profit, balance sheet and cash flows through
to 31 March 2014.
For the purposes of their assessment of the appropriateness of
the preparation of the Group's unaudited interim accounts on a
going concern basis, the Directors have considered the current cash
position, the availability of bank, and other, facilities and
forecasts of future trading. The Directors have assessed the
current level of forward bookings for the Leisure Airline and
Package Holidays businesses, the underlying assumptions and
principal areas of uncertainty within future forecasts, in
particular those related to market and customer risks which impact
on future bookings, cost management, working capital management and
treasury risks. A number of these are subject to market uncertainty
and impact financial covenants. Recognising the potential
uncertainty, the Directors have considered a range of actions
available to mitigate the impact of these potential risks should
they crystallise and have also reviewed the key strategies which
underpin the forecast and the Group's ability to implement them
successfully.
On the basis of the current liquidity position, the current
Aviation forward booking profile, the forecasts and these
considerations, the Directors have assessed future covenant
compliance and headroom for the foreseeable future and concluded
that it is appropriate for the unaudited financial statements for
the period ended 30 September 2011 to be prepared on a going
concern basis.
3. Adoption of new and revised standards
The following new or revised IFRS standards and IFRIC
interpretations will be adopted for purposes of the preparation of
future financial statements, where applicable. We do not anticipate
that the adoption of these new or revised standards and
interpretations will have a material impact on our financial
position or results from operations.
-- IFRS 10, "Consolidated Financial Statements" (effective for
fiscal periods beginning on or after January 1, 2013).
-- IFRS 13, "Fair Value Measurement" (effective for fiscal
periods beginning on or after January 1, 2013).
4. Segmental information
Business Segments
The Group's businesses are organised into three operating
segments:
-- Leisure Airline, being the Group's scheduled leisure airline,
trading under the Jet2.com brand;
-- Package Holidays, being the Group's tour operation, trading
under the Jet2holidays brand; and
-- Distribution & Logistics, being the Group's logistic
operation, trading under the Fowler Welch brand.
These divisions are the basis on which the Group reports its
primary segmental information in the day-to-day management of the
business. Following the identification of the operating segments
the Group has assessed the similarity of the characteristics of the
operating segments. Given the differences between the operating
segments, it is not appropriate to aggregate the segments for
reporting purposes and therefore all of the identified operating
segments are disclosed as reportable segments. The following is an
analysis of the Group's revenue by operating segment.
Revenue from reportable segments is measured on a basis
consistent with the income statement. Revenue is principally
generated from within the UK, the Group's country of domicile.
Segmental Revenues Half year Half year Year to
to to 31 March
30 September 30 September 2010 Restated
2011 2010
Restated GBPm
GBPm GBPm
-------------- -------------- ---------------
Leisure Airline sales 316.3 249.6 369.5
Package Holidays sales 83.3 33.8 47.7
Distribution & Logistics
sales 74.2 70.4 144.2
Inter-segment sales (28.1) (13.4) (18.5)
Total revenue 445.7 340.4 542.9
============== ============== ===============
The split of comparative segmental revenues have been updated to
reflect the inclusion of Package Holidays as a reportable
segment.
5. Earnings per share
The calculation of earnings per share is based on the
following:
Half year Half year Year to
to to 31 March
30 September 30 September 2011
2011 2010 Audited
Unaudited Unaudited
Profit for the period (GBPm) 31.1 28.0 17.3
-------------- -------------- ------------
Weighted average number of
ordinary shares in issue
during the period used to
calculate basic earnings
per share 141,943,410 141,349,326 141,558,080
Weighted average number of
ordinary shares in issue
during the period used to
calculate diluted earnings
per share 146,733,933 147,718,753 147,818,902
6. Dividends
An interim dividend has been proposed during the six month
period to 30 September 2011 of 0.43p per share (2010: 0.40p). The
dividend will be paid, out of the Company's available distributable
reserves, on 27 January 2012 to shareholders on the register at 30
December 2011. In accordance with IAS 1, dividends are recorded
only when paid and are shown as a movement in equity rather than as
a charge in the Income Statement.
7. Taxation
The tax charge for the period of GBP10.5m (GBP10.7m) is
calculated by applying an estimated effective tax rate of 26% to
the profit for the period (2010: 28%). The Government has also
indicated that it intends to enact future reductions in the main
tax rate of 1% each year down to 23% by 1 April 2014. As a result,
the Group's reported deferred tax liability of GBP27.2m (GBP16.8m)
would ultimately reduce by GBP3.2m to GBP24.0m.
8. Reconciliation of net cash flow to movement in net cash
Half year Half year Year to
to to 31 March
30 September 30 September 2011
2011 2010 Audited
Unaudited Unaudited
GBPm
GBPm GBPm
Increase / (decrease) in
cash in the period 5.1 (4.2) 46.1
(Increase) / decrease in
net debt in the period (0.3) 0.3 (8.8)
-------------- -------------- ----------
Change in net cash resulting
from cash flows in the period 4.8 (3.9) 37.3
Other non-cash changes - - -
Net cash at beginning of
period 88.9 51.6 51.6
Net cash at end of period 93.7 47.7 88.9
============== ============== ==========
9. Contingent liabilities
The Group has issued various guarantees in the ordinary course
of business, none of which is expected to lead to a financial gain
or loss.
The Group is currently involved in litigation proceedings 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.
10. Other matters
This report will be posted on the Group'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
END
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