TIDMDTG
RNS Number : 7430R
Dart Group PLC
22 November 2012
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 2012. These
results are presented under International Financial Reporting
Standards (IFRS).
Chairman's Statement
I am pleased to report on the Group's performance for the six
months ended 30 September 2012 in its three businesses, Jet2.com,
the North's leading leisure airline, Jet2holidays, the ATOL
protected package holidays operator, and Fowler Welch, one of the
UK's leading logistics providers. Group profit before tax was
GBP57.0m, an increase of 37% on the previous half year (2011:
GBP41.6m); turnover was up 31% at GBP584.5m (2011: GBP445.7m). The
increase in profitability reflects a strong summer for Jet2.com,
underpinned by the continued successful growth of Jet2holidays.
With our leisure airline concentrating on great leisure cities, and
Mediterranean and Canary Islands sun destinations, the business is
becoming increasingly seasonal as it continues to grow; therefore
higher losses are to be expected in the second half of the
year.
Net cash flow from operations of GBP81.0m was generated in the
period (2011: GBP10.7m). The increase over the previous half year
reflects the impact of improved trading performance in both
Jet2.com and Jet2holidays, together with significantly increased
forward bookings for both this Winter and next Summer. Total
capital expenditure amounted to GBP26.1m (2011: GBP10.6m), with
this growth reflecting further investment in the Group's aircraft
fleet.
Cash and money market deposits increased by GBP54.8m in the
period (2011: GBP0.6m), resulting in a balance of GBP206.8m (2011:
GBP107.4m) at the end of the half year, including advance payments
from Jet2.com and Jet2holidays customers of circa GBP98m (2011:
GBP63m).
Earnings per share increased to 30.11p from 21.82p. The Board
has decided to pay an increased interim dividend of 0.54p per share
(2011: 0.43p), in recognition of improved profit performance. The
dividend will be paid on 1 February 2013 to shareholders on the
register at 28 December 2012.
Leisure Airline
Jet2.com flew 3.6m scheduled passengers (2011: 3.2m) in the
period, an increase of 14%, with the total number of routes served
from all bases rising to 162 (2011: 148). Seat capacity increased
by 11% compared to the previous summer. Load factors increased from
89.8% to 91.6%, and net ticket yields increased from GBP52.63 to
GBP59.81. In total, revenues rose by 23% to GBP388m, as a result of
both increased passenger volumes and revenue per passenger. The
growth of Jet2holidays accounted for over two thirds of the
increase in Jet2.com passenger volumes and its growth was the
principal driver of the airline's increased load factors and
yields. Jet2.com's profit margins were slightly ahead of the
previous half year despite operating cost increases of 20%, which
were driven by higher fuel, maintenance and sub-charter costs, in
addition to our increased flying.
Retail sales per passenger increased 10% to GBP30.77 during the
half year (2011: GBP27.87) through a continued focus on
pre-departure, in-flight and ancillary product sales.
During Summer 2012 the company operated 44 aircraft (2011: 40)
focusing on its core high volume leisure destinations from our
eight Northern UK bases - Belfast, Blackpool, East Midlands,
Edinburgh, Glasgow, Leeds Bradford, Manchester and Newcastle
airports. Two purchased and two leased aircraft were added to the
fleet for Summer operation.
For Winter 2012/13, Jet2.com has increased capacity by 7%, with
growth provided by additional services to the Canary Islands. Our
ski services are enhanced by the addition of Grenoble as a new
destination.
Looking forward to Summer 2013, we plan to grow capacity by a
further 11% (Summer 2012: 11%) with additional services from each
of our bases to add frequencies and to support the growth of
Jet2holidays.
Jet2.com has a vibrant passenger charter operation providing
whole aircraft charter flights for many different customers
including other tour operators, the UK government and in support of
promotional, sporting and other events. We also fly 18 nightly
services for the Royal Mail ensuring that the first class post
arrives on time. In total, charter revenues were up 4% in the first
half of the year and forward passenger charter bookings for the key
Winter period are encouraging. As indicated in our full year
results announcement in June 2012, our last flight under the
present Royal Mail contract is in October 2014. This contract is
being retendered during this financial year, with the result
expected in the first quarter of 2013.
The recent ruling by the European Court of Justice in relation
to EU 261, which upholds the creation in certain circumstances of a
passenger right to compensation for delay, in addition to denied
boarding and flight cancellations, has created potential additional
compensation costs for the aviation sector, in many cases well
beyond the actual fare value. Over the coming months we will
establish a clearer picture on the implications for Jet2.com of
this decision.
Package Holidays
Jet2holidays, our ATOL protected tour operator, carried 312,000
customers on package holidays in the half year to 30 September 2012
(2011: 158,000). Revenue increased by 117% to GBP180.6m (2011:
GBP83.3m). This very considerable growth reflects our focused
development of package holiday products, improvements to the
Jet2holidays.com booking process and our ability to offer package
holidays to our existing airline destinations. Our great value all
inclusive holidays are 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 and half
board packages being particularly popular. Over 90% of our hotels
are contracted directly by the company. We have also recruited more
Jet2holidays in-resort representatives who are on hand to ensure
that everyone's holiday goes smoothly and to offer assistance to
those customers who need a little extra help.
Average holiday prices increased by 10%, reflecting both a shift
in mix towards all inclusive and higher grade hotels, and an
increase in flight prices, as Jet2holidays pays the website price
for substantially all its Jet2.com airline seats. We have also
increased Jet2holidays retail sales 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 continually develop the Jet2holidays.com
website in order to make the online booking process easier, with
recent improvements aimed particularly at families. Travel agency
distribution is an important part of the overall sales mix, with
circa 36% of sales being delivered through this channel via a range
of national, regional and local agencies.
For Summer 2013 we are continuing to develop our overall product
range. Growth in airline capacity is focussed both on increasing
frequencies, at great departure times, to our popular leisure
destinations and supporting the growth of Jet2holidays.
Distribution & Logistics
The Group's logistics company, Fowler Welch, provides integrated
supply chain solutions for retailers, food manufacturers, growers
and importers. Services from distribution centres in Spalding
(Lincolnshire), Teynham (Kent), Washington (Tyne & Wear),
Heywood (Greater Manchester), Portsmouth (Hampshire) and Newton
Abbot (Devon) 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 other transport solutions for a range of customers.
Overall revenues are up 8% half year on half year, with
additional warehousing and distribution business secured in our
Spalding and South Coast operations. The ambient business continues
to expand at both "the Hub" (our freehold distribution centre at
Heywood, Greater Manchester), with revenues increasing by 24% in
the first half of the year, and through other dedicated transport
solutions for our customers. Our container operations have grown
through targeted new business wins and existing customer
growth.
Operating margins are better than for the first half year of
2011/12 due to further revenue growth, improved fleet productivity
and a number of cost reduction initiatives. In addition, we have
improved operational efficiency through the reconfiguration of
warehouse space. Further operational efficiencies are also being
realised with the introduction of improvements to our vehicle
telemetry and scheduling, and driver development. Focus on vehicle
acquisition and operation have positively impacted fuel efficiency
and operating costs over the past six months. This is expected to
continue, along with investment in energy efficient lighting and
refrigeration equipment throughout our network.
Fowler Welch's reputation for high quality service gives a real
opportunity for further revenue growth in the ambient sector with,
particularly, the Hub having scope to capitalise further on its
500,000 sq ft capacity. The sales pipeline at this site in
particular remains buoyant.
Our Distribution & Logistics business is currently devoting
considerable resource to the development of IT systems and
infrastructure. Specifically, phase one of a new Transport
Management System will shortly be rolled out, with the anticipated
delivery of the system across our entire transport network by
Summer 2013. This will provide the company with greater visibility
of resources, volumes and operational data, enabling further focus
on customer service and efficiencies.
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
positive with strong Jet2.com Summer passenger volumes underpinned
by the continued successful growth of Jet2holidays and no doubt
assisted by the particularly poor British summer weather. Fowler
Welch has traded in line with expectations in a sector that
continues to experience tight margins.
As previously noted, our leisure travel operations are becoming
increasingly seasonal as we continue to grow the business, and
therefore increased winter losses are to be expected.
Notwithstanding this, and the current economic climate, the Board
expects to exceed current market expectations for the year ending
31 March 2013.
Philip Meeson
Chairman 22 November 2012
www.dartgroup.co.uk
Enquiries:
Philip Meeson, Chairman 07785 258666
Andrew Merrick, Group Finance Director 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 2012
Half year Half year Year ended
ended 30 ended 31 March
September 30 September 2012
2012 2011 Audited
Unaudited Unaudited
Continuing operations Note GBPm GBPm GBPm
------------ ----------------- -------------
Turnover 4 584.5 445.7 683.0
Net operating expenses (526.0) (403.4) (654.5)
Operating profit 58.5 42.3 28.5
Finance income 1.0 0.2 1.4
Finance costs (2.5) (0.9) (1.8)
------------ ----------------- -------------
Net financing costs (1.5) (0.7) (0.4)
Profit on disposal of - - -
fixed assets
Profit before taxation 57.0 41.6 28.1
Taxation 7 (13.9) (10.5) (5.4)
------------ ----------------- -------------
Profit for the period (all
attributable to
equity shareholders of the
parent company) 43.1 31.1 22.7
Earnings per share 5
- basic 30.11p 21.82p 16.01p
- diluted 29.12p 21.11p 15.48p
Dart Group PLC
Consolidated Group Statement of Comprehensive Income
(unaudited)
For the half year ended 30 September 2012
Half year Half year Year ended
ended ended 30 31 March
30 September September 2012
2012 2011 Audited
Unaudited Unaudited GBPm
GBPm GBPm
Profit for the period attributable
to equity holders of the
parent company 43.1 31.1 22.7
Effective portion of changes
in fair value movements in
cash flow hedges (17.3) (27.0) (14.3)
Net change in fair value - - -
of effective cash flow hedges
transferred to profit
Taxation on components of
other comprehensive income 4.1 7.0 3.8
-------------- ----------- -----------
Other comprehensive income
& expense for the period,
net of taxation (13.2) (20.0) (10.5)
Total comprehensive income
for the period attributable
to equity holders of the
parent company 29.9 11.1 12.2
============== =========== ===========
Dart Group PLC
Consolidated Group Balance Sheet (unaudited)
As at 30 September 2012
30 September 30 September 31 March
2012 2011 2012
Unaudited Unaudited Audited
GBPm GBPm GBPm
Non-current assets
Goodwill 6.8 6.8 6.8
Property, plant and
equipment 236.7 211.6 234.9
Derivative financial
instruments 0.4 4.9 3.6
243.9 223.3 245.3
------------- ------------- ---------
Current assets
Inventories 1.1 0.7 1.4
Trade and other receivables 105.6 76.0 117.4
Derivative financial
instruments 6.2 15.7 25.8
Money market deposits 6.0 4.0 77.0
Cash and cash equivalents 200.8 103.4 75.0
319.7 199.8 296.6
------------- ------------- ---------
Total assets 563.6 423.1 541.9
------------- ------------- ---------
Current liabilities
Trade and other payables 159.1 114.1 61.2
Deferred revenue 159.8 88.1 256.8
Borrowings 0.8 0.8 0.8
Provisions 3.0 3.0 1.7
Derivative financial
instruments 5.3 8.2 7.8
328.0 214.2 328.3
------------- ------------- ---------
Non-current liabilities
Other non-current liabilities 11.5 9.0 11.9
Borrowings 8.1 8.9 8.5
Derivative financial
instruments 1.1 4.5 1.4
Deferred tax liabilities 25.6 27.2 32.9
------------- ------------- ---------
46.3 49.6 54.7
------------- ------------- ---------
Total liabilities 374.3 263.8 383.0
Net assets 189.3 159.3 158.9
============= ============= =========
Shareholders' equity
Share capital 1.8 1.8 1.8
Share premium 10.1 9.7 9.8
Cash flow hedging reserve 1.9 5.6 15.1
Retained earnings 175.5 142.2 132.2
---------
Total shareholders'
equity 189.3 159.3 158.9
============= ============= =========
Dart Group PLC
Consolidated Group Cash Flow Statement (unaudited)
For the half year ended 30 September 2012
Half year Half year Year ended
ended 30 ended 30 31 March
September September 2012
2012 2011 Audited
Unaudited Unaudited GBPm
GBPm GBPm
Cash flows from operating
activities
Profit on ordinary activities
before taxation 57.0 41.6 28.1
Adjustments for:
Finance income (1.0) (0.2) (1.4)
Finance costs 2.5 0.9 1.8
Depreciation 24.1 21.2 34.4
Equity settled share based
payments 0.2 0.2 0.4
Operating cash flows before
movements in working capital 82.8 63.7 63.3
Decrease / (increase) in inventories 0.3 0.1 (0.6)
Decrease / (increase) in trade
and other receivables 11.8 (1.9) (43.3)
Increase in trade and other payables 82.4 41.3 2.7
(Decrease) / increase in deferred
revenue (97.0) (89.0) 79.7
Increase / (decrease) in provisions 1.3 (0.9) (2.2)
Cash generated from operations 81.6 13.3 99.6
Interest received 1.0 0.2 0.5
Interest paid (0.5) (0.9) (1.8)
Income taxes paid (1.1) (1.9) (3.8)
Net cash from operating activities 81.0 10.7 94.5
----------- ----------- -----------
Cash flows from investing
activities
Purchase of property, plant and
equipment (26.1) (10.6) (47.3)
Proceeds from sale of property,
plant and equipment - - 0.3
Net decrease / (increase)
in money market deposits 71.0 4.5 (68.5)
Net cash from / (used in)
investing activities 44.9 (6.1) (115.5)
----------- ----------- -----------
Cash flows from financing
activities
Repayment of borrowings (0.4) (0.3) (1.9)
New loans advanced - 0.7 0.6
Proceeds on issue of shares 0.3 0.1 0.2
Equity dividends paid - - (1.8)
Net cash (used in) / from financing
activities (0.1) 0.5 (2.9)
----------- ----------- -----------
Effect of foreign exchange
rate changes - - 0.6
Net increase / (decrease) in
cash in the period 125.8 5.1 (23.3)
Cash and cash equivalents at
beginning of period 75.0 98.3 98.3
Cash and cash equivalents
at end of period 200.8 103.4 75.0
=========== =========== ===========
Dart Group PLC
Consolidated Group Statement of Changes in Equity
(unaudited)
For the half year ended 30 September 2012
Share Share Cash flow Retained Total reserves
capital premium hedging earnings
reserve
GBPm GBPm GBPm GBPm GBPm
--------- --------- ---------- ---------- ---------------
Balance at 1 April
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
Total comprehensive
income for the period - - 9.5 (8.4) 1.1
Dividends paid in
the period - - - (1.8) (1.8)
Share based payments - - - 0.2 0.2
Issue of share capital - 0.1 - - 0.1
Balance at 31 March
2012 1.8 9.8 15.1 132.2 158.9
Total comprehensive
income for the period - - (13.2) 43.1 29.9
Share based payments - - - 0.2 0.2
Issue of share capital - 0.3 - - 0.3
Balance at 30 September
2012 1.8 10.1 1.9 175.5 189.3
========= ========= ========== ========== ===============
Dart Group PLC
Notes to the consolidated financial statements
For the half year ended 30 September 2012 (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 2012
was approved by the Board of Directors on 21 November 2012.
2. Accounting policies
Basis of preparation of the interim report
The unaudited consolidated interim financial report for the six
months ended 30 September 2012 does not constitute statutory
accounts as defined in s435 of the Companies Act 2006. The accounts
for the year ended 31 March 2012 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 2012 have been
audited. The comparative figures for the period ended 30 September
2011 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 2015.
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 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
Leisure Airline and Package Holidays 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 2012 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.
International Financial Applies to
Reporting Standards periods
beginning after
-------------------------------------------------- -----------------
IFRS 10 Consolidated Financial Statements January 2013
IFRS 12 Disclosure of Interests in Other Entities January 2013
IFRS 13 Fair value measurement January 2013
IAS 19 Post-employment benefits January 2013
IFRS 9 Financial Instruments January 2015
4. Segmental information
Business Segments
The Group's businesses are organised into three operating
segments:
-- Leisure Airline, comprising the Group's scheduled and charter airline, Jet2.com;
-- Package Holidays, comprising the Group's ATOL protected tour operator, Jet2holidays; and
-- Distribution & Logistics, comprising the Group's logistics company, Fowler Welch.
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 2012
2012 2011
GBPm
GBPm GBPm
-------------- -------------- ----------
Leisure Airline sales 388.0 316.3 461.3
Package Holidays sales 180.6 83.3 114.5
Distribution & Logistics
sales 80.3 74.2 152.4
Inter-segment sales (64.4) (28.1) (45.2)
Total revenue 584.5 445.7 683.0
============== ============== ==========
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 2012 Audited
2012 2011
Unaudited Unaudited
Profit for the period (GBPm) 43.1 31.1 22.7
-------------- -------------- --------------
Weighted average number
of ordinary shares in issue
during the period used to
calculate basic earnings
per share 143,112,650 141,943,410 142,129,972
Weighted average number
of ordinary shares in issue
during the period used to
calculate diluted earnings
per share 147,947,206 146,733,933 147,002,286
6. Dividends
An interim dividend has been proposed during the six month
period to 30 September 2012 of 0.54p per share (2011: 0.43p). The
dividend will be paid, out of the Company's available distributable
reserves, on 1 February 2013 to shareholders on the register at 28
December 2012. 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 GBP13.9m (2011: GBP10.5m) is
calculated by applying an estimated effective tax rate of 24% to
the profit for the period (2011: 26%). The Government has also
indicated that it intends to enact future reductions in the main
tax rate of 1% each year down to 22% by 1 April 2014. As a result,
the Group's reported deferred tax liability of GBP25.6m (2011:
GBP27.2m) would ultimately reduce by GBP2.1m to GBP23.5m.
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 2012
2012 2011 Audited
Unaudited Unaudited
GBPm
GBPm GBPm
Increase / (decrease) in
cash in the period 125.8 5.1 (23.3)
(Increase) / decrease in
net debt in the period 0.4 (0.3) 0.1
-------------- -------------- ----------
Change in net cash resulting
from cash flows in the period 126.2 4.8 (23.2)
Other non-cash changes - - -
Net cash at beginning of
period 65.7 88.9 88.9
Net cash at end of period 191.9 93.7 65.7
============== ============== ==========
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.
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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