TIDMDTG
RNS Number : 5675K
Dart Group PLC
26 June 2014
DART GROUP PLC
PRELIMINARY UNAUDITED RESULTS FOR YEAR ENDED 31 MARCH 2014
Dart Group PLC (the "Group"), the Leisure Airline, Package
Holidays and Distribution & Logistics Group, announces its
preliminary results for the year ended 31 March 2014. These results
are presented under International Financial Reporting Standards
("IFRS").
CHAIRMAN'S STATEMENT
It gives me great pleasure to report that the Group delivered a
strong trading performance in the year ended 31 March 2014.
Operating profit increased by 30% to GBP49.2m (2013: GBP37.9m) and
pre-tax profit by 4% to GBP42.1m (2013: GBP40.5m). Growth in
earnings per share was 14% to 24.68p (2013: 21.73p).
We have a progressive dividend policy and in consideration of
the Group's improved trading performance and liquidity, the Board
is recommending a final dividend of 2.14p per share (2013: 1.33p)
bringing the total proposed dividend to 2.74p per share for the
year to 31 March 2014 (2013: 1.87p), an increase of 47%. The final
dividend, which is subject to shareholder approval at the Company's
Annual General Meeting on 4 September 2014, will be payable on 17
October 2014 to shareholders on the register at the close of
business on 12 September 2014.
The performance in the year reflects the continuing success of
the Group's Leisure Travel businesses.
Jet2holidays, the Group's package holiday business, almost
doubled the number of customers enjoying its great value holidays
to 830,019 (2013: 417,390). This growth is a reflection of the
successful development of the Jet2holidays product, which offers
packages encompassing flights, transfers and accommodation ranging
from budget self-catering, to five-star luxury hotels. As a result,
Jet2holidays' operating profit increased by 122% to GBP14.4m (2013:
GBP6.5m) as turnover increased 103% to GBP496.2m (2013:
GBP244.8m).
Turnover in Jet2.com, the Group's Leisure Airline, increased by
16% to GBP643.1m (2013: GBP556.2m) as demand for seats, supported
by Jet2holidays, resulted in another year of improved load factors
and increased net ticket yields. Though operating profit increased
by 17% to GBP31.2m (2013: GBP26.7m), profit before tax reduced to
GBP23.9m (2013: GBP29.3m) due to adjustments associated with the
revaluation of US dollar cash balances and certain ineffective
hedges.
Our important and long-established Distribution & Logistics
business, Fowler Welch, achieved a profit before tax of GBP3.3m
(2013: GBP4.4m). This result was attained despite an inconsistent
first half to the year when the business was adversely affected by
an unexpectedly varied profile of seasonal volumes required by its
supermarket customers during late July, August and September,
requiring extra resource to uphold service levels.
Net cash flow from operating activities amounted to GBP130.8m
(2013: GBP150.3m). The Group continues to invest to ensure that it
maintains its growth trajectory. Capital expenditure during the
year was GBP83.5m (2013: GBP79.7m), and principally related to
long-term maintenance spend on aircraft and engines, the
acquisition of two Boeing 737 aircraft, and investment in our new
flight crew training centre, incorporating three flight
simulators.
As at 31 March 2014, the Group's cash balances, including money
market deposits, had grown by GBP42.8m (2013: GBP68.9m) to
GBP263.7m (2013: GBP220.9m), which included GBP286m (2013: GBP253m)
of advance payments from customers in respect of their future
flights and holidays.
The Group's cash and money market deposits include GBP140.7m
(2013: GBP145.8m) which is restricted by its merchant acquirers as
collateral against a proportion of forward bookings paid for by
credit or debit card. These balances are considered to be
restricted until the respective customers have travelled.
Leisure Travel - Leisure Airline and Package Holidays
Good progress has been made in our Leisure Travel businesses
over the year. We added 32 new routes connecting our Northern UK
bases with our holiday destinations, primarily popular
Mediterranean and Canary Island resorts and great Leisure
Cities.
Of our 2.8 million departing customers, over 830,000 purchased a
Jet2holidays package, making us the third largest CAA licensed,
ATOL bonded holiday company in the UK. The all-inclusive package
holiday represents great and dependable value, and is a
long-established and popular product, with special attraction for
customers on a tight budget in these difficult economic times.
Our low deposit, 22kg baggage allowance and family friendly
flight times all contribute to the attraction of our package
holidays product. And we ensure that we deliver a holiday that our
customers can both look forward to and remember with pleasure - the
flights with Jet2.com, carefully organised coach transfers,
attractive hotels with good facilities, and friendly
representatives in resort.
During the summer of 2013 Jet2.com operated 53 aircraft from its
eight Northern UK bases and achieved an improved load factor of
91%. The fleet has grown to 55 for summer 2014 with the addition of
5 leased Boeing 737-800's and a reduction in the number of
short-term chartered aircraft. We will continue to increase our
fleet conservatively and in line with the healthy demand for our
products.
Whilst price is certainly a crucial factor in the choice of a
package holiday or holiday flight, the all round product is what is
anticipated and remembered. We believe our focus on our product is
second to none and that we have a great future in this attractive
business.
To support our growth and the infrastructure needed to deliver
our package holidays we entered into a lease, in March 2013, for
72,000 square feet of high grade office space, near the centre of
Leeds, to house our commercial and administrative teams together
with our large call centre. Our operational teams remain at Leeds
Bradford International Airport - close to the action and to the
customer.
In September 2013 we purchased premises in nearby Bradford to
develop a flight simulator centre for pilot and cabin crew
training. Hitherto, we have used third party providers for the
simulator training which pilots have to undertake prior to flying
an aircraft type and biannually thereafter. This has been a GBP9.2
million investment which will ensure high professional standards
for our nearly 600 pilots. Pilot training commenced at the centre
in May 2014. At the same time, we have expanded our pilot and
engineering apprentice schemes - taking 30 apprentices yearly - a
great investment in the future of Jet2.com.
In January 2014 we were pleased to renew our agreement with
Royal Mail for the operation of six night mail flights, every
weekday, from our operational bases. We utilise our Boeing 737-300
QC ("Quick Change") aircraft which are converted from passenger to
freighter configuration in less than 40 minutes. They then fly UK
domestic freight services to enable Royal Mail to achieve their
next day delivery targets.
There has been considerable interest in an appeal hearing before
the Court of Appeal relating to a claim for compensation, made by
Mr Ronald Huzar, under EU Regulation 261 in respect of a Jet2.com
flight which was delayed due to a technical defect. In line with
guidance published by the UK Civil Aviation Authority and other
European National Enforcement Bodies, Jet2.com maintained that the
technical defect was an "extraordinary circumstance" which relieved
it of the obligation to pay compensation. In a judgment given on 11
June 2014, the Court of Appeal held that the technical defect was
not an extraordinary circumstance and that compensation is payable.
Jet2.com is not leaving the matter there and is seeking ultimate
resolution by appealing to the Supreme Court, which may involve,
instead or in addition, reference to the Court of Justice of the
European Union.
Mr Huzar and his family were delayed on return from their
holiday near Malaga in Spain, in October 2011. A replacement
aircraft was positioned to Malaga to ensure our customers returned
home as soon as possible. During the delay, Jet2.com fully met its
duty of care obligations, providing food and hotel accommodation to
all customers on the affected flight.
Distribution & Logistics
Our distribution business Fowler Welch is a leading provider of
supply chain logistics, particularly temperature controlled, to
retailers and their suppliers, growers, importers and
manufacturers.
The Company operates from nine UK distribution sites, with major
operations in the key produce growing and importing areas of
Spalding in Lincolnshire, Teynham in Kent and Hilsea near
Portsmouth. Fowler Welch also operates a 500,000 square foot
ambient (non-temperature controlled) consolidation and distribution
centre near Bury, Greater Manchester.
The Company's mission is to ensure that by close co-operation
with its supermarket customers and their suppliers, the retailer's
shelves are continually supplied with fast moving produce and
prepared foods, whatever the levels of variability in demand. These
levels often vary considerably on a daily basis and may be
influenced by many factors, including sporting and social events,
such as the World Cup, public holidays and weather suitable for
BBQ's !
There is a wealth of experience and expertise within Fowler
Welch that ensures the mission is achieved and this has been
recognised by its customers, including recently when it was awarded
"Carrier of The Year" by Asda for the third year in succession.
During the past year there has been significant growth in the
Company's sales pipeline with revenues progressively coming
on-stream during the current financial year. While existing
business is being vigorously developed we are particularly pleased
to announce that Fowler Welch has recently entered into a
Memorandum of Understanding for a joint venture to store, ripen and
pack stone-fruit, and exotic and organic fruits, at its Teynham
facility. Our partner in this venture is a leading supplier of
fruit, from the UK and around the world, to the multiple
retailers.
Following processing and packing, the fruit will be delivered to
Fowler Welch's customers through its distribution network. The
overall effect is to widen the scope of our business in Kent. In
anticipation of the growth potential at Teynham, which is close to
the port of Dover and the Channel Tunnel freight terminal, and
therefore situated not only in Kent, "The Garden of England" but on
a main artery for imported fruits and produce to the UK, Fowler
Welch has obtained planning permission for the substantial
development and expansion of the site, which is anticipated to take
place in the coming year.
We are pleased that the many business initiatives laid in place
by the vigorous management of the Distribution Division are now
coming to fruition. Given these developments we believe there is a
bright, interesting and profitable future ahead.
Outlook
Taking people on holiday, whether through the sale of a flight
or a full holiday package, and the distribution of produce and
prepared foods sold by supermarkets, are much-needed,
high-potential businesses. Our scale, experience and
competitiveness in each sector gives us optimism in our outlook for
the long-term growth of the Group.
In relation to the current financial year, we are finding demand
for leisure travel, this summer, to the markets we serve, less
buoyant than we would have hoped for and market pricing weak. This
may be due to the weather, the World Cup, or because the financial
recovery hasn't yet taken hold in our home territory, the North of
the UK.
Unfortunately, therefore, in view of the current visibility we
have of our remaining summer 2014 forward bookings, we now expect
the current year operating profit outturn to be lower than previous
market expectations.
Philip Meeson
Chairman
26 June 2014
BUSINESS & FINANCIAL REVIEW
The Group currently comprises three operating businesses,
Leisure Airline, Package Holidays and Distribution & Logistics.
The Leisure Airline and Package Holidays operations are working
progressively closer together to provide a range of Leisure Travel
services to our Northern UK customer base.
Group financial performance 2013/14
The Group's financial performance for the year to 31 March 2014
is reported in line with International Financial Reporting
Standards ("IFRS"), as adopted by the EU, which were effective at
31 March 2014.
Summary Income Statement
2014 2013 Change
GBPm GBPm
Turnover 1,120.2 869.2 29%
Net operating expenses (1,071.0) (831.3) 29%
---------- -------- -----------
Operating profit 49.2 37.9 30%
Net financing income - 0.6 -
Revaluation of derivative hedges (3.3) 2.0 (265%)
Revaluation of foreign currency (3.8) - -
balances
Group profit before tax 42.1 40.5 4%
Net financing income & revaluations 7.1 (2.6) 373%
Depreciation 60.7 45.5 33%
EBITDA 109.9 83.4 32%
========== ======== ===========
Operating profit margin 4.4% 4.4% - ppts
(0.9)
Group profit before tax margin 3.8% 4.7% ppts
EBITDA margin 9.8% 9.6% 0.2 ppts
---------- -------- -----------
The Group's turnover increased 29% from the prior year to
GBP1,120.2m (2013: GBP869.2m), driven by higher Package Holidays
volumes and increased yields in both our Leisure Airline and
Package Holidays businesses.
Continued focus on revenue, operational efficiencies and careful
investment resulted in operating profit growth of 30% to GBP49.2m
(2013: GBP37.9m). The year on year improvement is analysed by
segment below:
Segment GBPm GBPm
2013 operating
profit 37.9
Leisure Airline +4.5
Package Holidays +7.9
Distribution &
Logistics (1.1)
-------
Change +11.3
-------
2014 operating
profit 49.2
=======
Net financing costs of GBP7.1m comprised GBP3.3m in relation to
mark to market adjustments taken on certain ineffective derivative
hedges and GBP3.8m relating to the revaluation of US dollar
currency balances held at year end. As a result, the Group's
statutory profit before tax increased by 4% to GBP42.1m (2013:
GBP40.5m).
EBITDA increased by 32% to GBP109.9m (2013: GBP83.4m), which was
slightly higher than operating profit growth.
The Group's effective tax rate of 15% (2013: 23%) was lower than
the headline rate of corporation tax of 23% as a consequence of
legislation enacted in the year. This legislation reduces the UK
corporation tax rate to 20% from 1 April 2015, resulting in a
reduction of the Group's deferred tax liability.
Basic earnings per share increased by 13.6% to 24.68p (2013:
21.73p), as profit after taxation increased 15% from GBP31.2m to
GBP35.9m.
After taking into consideration the liquidity in the business at
the end of the financial year, the Board is recommending a final
dividend of 2.14p per share (2013: 1.33p). On 22 November 2013 the
Board declared an interim dividend of 0.60p per share (2013:
0.54p), equating to a full year dividend of 2.74p per share (2013:
1.87p).
Summary Cash Flow
2014 2013 Change
GBPm GBPm
EBITDA 109.9 83.4 32%
Other P&L adjustments 0.4 0.4 -
Movements in working capital 26.6 71.5 (63%)
Interest & taxes (6.1) (5.0) (22%)
------- ------- -------
Net cash generated from operating
activities 130.8 150.3 (13%)
Investing activities(a) (83.5) (79.7) (5%)
Other items (4.5) (1.7) (165%)
Increase in net cash/money market
deposits 42.8 68.9 (38%)
======= ======= =======
Net cash generated from operating activities was GBP130.8m
(2013: GBP150.3m). Capital expenditure increased from GBP79.7m to
GBP83.5m, principally the result of increased expenditure on the
long term maintenance of aircraft. The airline also purchased two
Boeing 737s and invested in its own flight crew training centre,
including three flight simulators. The Group's capital expenditure
as a % of EBITDA reduced to 76% (2013: 96%), as the business
continued to fund growth organically.
The Group generated net cash inflows(b) of GBP42.8m in the year
(2013: GBP68.9m), resulting in a year end cash position, including
money market deposits, of GBP263.7m (2013: GBP220.9m). Total cash
received from Jet2holidays and Jet2.com customers in advance of
their trips, amounted to GBP286m (2013: GBP253m) at that time.
The year end cash position included GBP140.7m (2013: GBP145.8m)
considered restricted by the Group's merchant acquirers, as
collateral against a proportion of forward bookings paid for by
credit or debit card. These balances become unrestricted once our
respective customers have travelled.
The Group is required by the UK Civil Aviation Authority to
maintain certain levels of "available liquidity", which is defined
as free cash plus available facilities.
The Group refinanced its bank facilities in early July 2013 with
funding lines incorporating a GBP50.0m revolving credit facility
committed until the end of August 2017 and a GBP10.0m bank loan
facility maturing at the end of August 2017.
Summary Balance Sheet
2014 2013 Change
GBPm GBPm
Non-current assets 298.8 276.9 8%
Net current assets(c) 145.2 150.7 (4%)
Deferred revenue (484.9) (407.5) (19%)
Other liabilities (41.2) (54.4) 24%
Cash and money market deposits 263.7 220.9 19%
-------- -------- -------
Shareholders' equity 181.6 186.6 (3%)
======== ======== =======
Net assets reduced by GBP5.0m due to profit after tax of
GBP35.9m (2013: GBP31.2m) being negated by adverse movements in the
cash flow hedging reserve, as a result of mark to market movements
on US dollar and jet fuel forward contracts.
Note (a): Increase in money market deposits of GBP22.5m (2013:
GBP47m reduction) is presented as cash.
Note (b): Cash flows are reported including the movement of
money market deposits (cash deposits with maturity of more than
three months from point of acquisition) to give readers an
understanding of total cash generation. The consolidated Group Cash
Flow Statement reports net cash flow excluding these movements.
Note (c): stated excluding cash and cash equivalents, money
market deposits and deferred revenue.
Segmental performance
Leisure Travel - Leisure Airline
The Leisure Airline business trades under the Jet2.com brand and
operates scheduled flights to a range of leisure destinations from
its bases at Belfast International, Blackpool, East Midlands,
Edinburgh, Glasgow, Leeds Bradford, Manchester and Newcastle
airports.
Total Leisure Airline turnover, including sales of seats to
Jet2holidays, increased by 16% to GBP643.1m (2013: GBP556.2m). A
14% capacity increase, targeted at high volume Mediterranean and
Canary Island leisure destination routes, resulted in a 16%
increase in flown passenger sectors to 5.61 million (2013: 4.84
million). Careful capacity management and a growing mix of "Far
Sun" flying yielded a 5% increase in net ticket price per passenger
to GBP78.39 (2013: GBP74.66) and improved load factors at 91%
(2013: 90%). This load factor improvement was in part underpinned
by the sale of seats to Jet2holidays which represented 30% (2013:
17%) of the airline's total seat sales in the year.
Retail revenue (non-ticket revenue) grew to GBP32.14 per
passenger (2013: GBP30.96), a result of continued focus on
pre-departure (primarily hold bags and advanced seat assignment),
in-flight (pre-ordered meals, drinks, snacks and perfumes) and
ancillary product (car hire and travel insurance) sales. Retail
revenue performance continues to be optimised through our customer
contact programme and dynamic pricing, ensuring that customers are
offered the best products and value for their particular needs.
Although operating expenses grew by 16%, this increase was
predominantly activity-related. As a result, operating profit
increased by 17% to GBP31.2m (2013: GBP26.7m).
During the year, Jet2.com expanded its route network, operating
a total of 205 routes (2013: 173). Jet2.com has further increased
seat capacity by 13% for summer 2014, growth continuing to be
focused on high volume leisure destinations. The airline will fly
229 routes to 51 destinations in 18 different countries in
2014/15.
The delivery of great customer service is at the heart of
Jet2.com brand values. To ensure that every employee understands
this ethos, a company-wide employee engagement programme called
'Take Me There' is delivered, ensuring every colleague in the
business has received training on the importance of delivering
customer service excellence at every point in our customers'
journey.
Leisure Airline
2014 2013 Change
GBPm GBPm
Turnover 643.1 556.2 16%
Operating expenses (611.9) (529.5) (16%)
-------- -------- -----------
Operating profit 31.2 26.7 17%
Net financing (costs) / income (0.2) 0.6 (133%)
Revaluation of derivative hedges (3.3) 2.0 (265%)
Revaluation of foreign currency (3.8) - -
balances
Profit before tax 23.9 29.3 (18%)
Net financing costs / (income)
and revaluations 7.3 (2.6) 381%
Depreciation 58.4 43.1 35%
-------- -------- -----------
Leisure Airline EBITDA 89.6 69.8 28%
-------- -------- -----------
Operating profit margin 4.9% 4.8% 0.1 ppt
Profit before tax margin 3.7% 5.3% (1.6 ppts)
EBITDA margin 13.9% 12.5% 1.4 ppts
-------- -------- -----------
KPIs
2014 2013 Change
Number of owned aircraft at 31
March 44 42 5%
Number of leased aircraft at 31
March 6 4 50%
Number of routes 205 173 18%
Seats available (capacity) 6.16m 5.38m 14%
Flown passenger sectors 5.61m 4.84m 16%
Load factor 91.0% 90.0% 1 ppt
Net ticket yield GBP78.39 GBP74.66 5%
Retail revenue per passenger GBP32.14 GBP30.96 4%
Average hedged price of fuel (US$
per tonne) $961 $979 2%
Percentage of estimated annual
fuel requirement hedged for the
next financial year 99% 99% -
Advance sales made at year end
date GBP172.8m GBP176.0m (2%)
Average staff numbers 2,825 2,288 23%
Leisure Travel - Package Holidays
Jet2holidays, the Group's package holiday brand, is an integral
part of the Group's leisure travel activities, working closely with
Jet2.com to provide ATOL protected holidays to a wide range of
destinations from our eight Northern UK airports.
The business has once again doubled its customer numbers and as
a result turnover increased 103% to GBP496.2m (2013: GBP244.8m) as
830,019 customers enjoyed a great value package holiday in the year
(2013: 417,390).
The focus on high volume, leisure destinations and in particular
"Far Sun" destinations such as those in the Canary Islands and the
Eastern Mediterranean has improved gross margin per holiday. This
improvement is also in part a reflection of the continued
development of the Jet2holidays product which offers packages
encompassing flights, transfers and accommodation, ranging from
budget self-catering, to five-star luxury hotels, with
all-inclusive and three and four-star packages being particularly
popular.
The increasing scale of the business has enabled operating
profits to increase by 122% to GBP14.4m (2013: GBP6.5m).
Approximately 50% of Jet2holidays are sold over the Internet,
20% from the business's UK-based call centre, and the balance via
high street and online travel agents. Sales through the travel
agents remain an important channel and Jet2holidays can be booked
through all major travel agent chains, key multiples, homeworker
companies and independents in the North of the UK, each being
proactively supported and nurtured.
The award-winning Jet2holidays.com website and our new and
developing Jet2holidays mobile applications are continuously
tailored to improve the quality of both the customer and the travel
agents' booking experience. Website visits are considerably higher
than the previous year and conversion rates remain strong. During
the year we also moved our Jet2.com call centre back into the UK
from South Africa, consolidating it into our Jet2holidays call
centre in our new offices in Leeds, enabling a consistent customer
experience between the Jet2.com and Jet2holidays brands.
Looking forward to the year ending 31 March 2015, the business
will continue to build brand and product awareness in its core
markets, underpinned by strong and creative marketing and its focus
on excellent customer service. Investment in TV advertising,
intelligent use of social media and other online channels of
communication, in addition to cross-selling between Jet2holidays
and Jet2.com, will attract new customers and, importantly, generate
valuable repeat business.
Package Holidays
2014 2013 Change
GBPm GBPm
Turnover 496.2 244.8 103%
Operating expenses (481.8) (238.3) (102%)
---------- ---------- ---------
Operating profit 14.4 6.5 122%
Net financing income 0.5 0.3 67%
Profit before tax 14.9 6.8 119%
Net financing income (0.5) (0.3) (67%)
Depreciation 0.2 0.3 33%
---------- ---------- ---------
Package Holidays EBITDA 14.6 6.8 115%
========== ========== =========
Operating profit margin 2.9% 2.7% 0.2 ppts
Profit before tax margin 3.0% 2.8% 0.2 ppts
EBITDA margin 2.9% 2.8% 0.1 ppts
---------- ---------- ---------
KPIs
2014 2013 Change
Passenger numbers 830,019 417,390 99%
Advance sales made at year end
date GBP312.1m GBP231.5m 35%
Average staff numbers 261 136 92%
Distribution & Logistics
The Group's distribution business, Fowler Welch, is one of the
UK's leading logistics providers to the food industry supply chain,
serving retailers, growers, importers and manufacturers across its
network of nine sites, strategically located to meet demand for its
services. A full range of added value services is provided
including storage, case level picking and an award winning national
distribution network.
Revenues reduced in the year by 1.3% to GBP153.2m (GBP155.2m)
primarily as a result of the decision to close our European
operating base in Holland plus a small regional support hub. The
business was also adversely affected by the unexpectedly varied
profile of seasonal volumes for its supermarket customers during
late July, August and September, which required extra resource to
uphold service levels. These factors, together with investment made
in people and infrastructure to support future growth, meant that
operating profits reduced 23% to GBP3.6m (2013: GBP4.7m) which
included a GBP0.4m charge for closure costs.
Fowler Welch is bringing its vast experience of short
distribution lead times gained from its chill and produce
operations to the ambient (non temperature controlled) sector, with
revenues up by over 4% year-on-year at Heywood, the ambient shared
user storage and distribution site near Bury, Greater Manchester.
New revenues have been secured from a growing customer base and
further contracts secured for implementation in the 2014/15
financial year. This operation is now fully established, a fact
underlined by the operational team being awarded "Primary Carrier
of the Year" by ASDA for the third consecutive year.
Spalding, our key distribution centre in the major growing
region of Lincolnshire, grew revenues by 2.5% year on year. Further
growth in the current financial year will stem from new substantial
contracted volumes, including a recently secured long term
commitment from Tulip, a Danish-owned food producer employing
around 8,000 people in the UK. This contract provides a specialist
distribution service for hanging meat, supplying processing plants
across the UK.
Our recently expanded and refurbished Hilsea depot, which is
well located near to Portsmouth International Port, has seen
customers take advantage of its full range of warehousing,
consolidation and distribution services. Further consolidation and
distribution opportunities are being targeted for the year
ahead.
Mid-way through the year, new business was introduced at the
Company's Desborough operation in Northamptonshire, balancing flows
and increasing two-way vehicle utilisation. Further opportunities
to increase the efficiency of the Fowler Welch distribution network
are being identified as we gain enhanced operational visibility
through Enterprise, our new distribution, planning and transport
operating system.
Fowler Welch's Kent operations, at its Teynham and Paddock Wood
distribution centres, sit in the heart of that county's fruit
growing areas and also provide distribution services for fruit and
produce imported from across the English Channel. Fowler Welch has
recently entered into a Memorandum of Understanding for a joint
venture to store, ripen and pack stone-fruit, and exotic and
organic fruits at Teynham. These services will be performed using
the latest technology and market-leading grading, sorting and
packing equipment to ensure the highest of standards are achieved
for the joint venture's customers. The packed product will then be
delivered to customers through the Company's distribution
system.
In view of the planned expansion of activities at Teynham,
planning permission has been obtained to extend the distribution
centre. This investment will be progressed in line with actual
growth of the volumes at the site.
Though the marketplace remains extremely competitive and
price-focused, the outlook for Fowler Welch is encouraging. A well
positioned national network of sites, focus on its core activities
of added value services, a new joint venture and its growing
reputation in the ambient arena will continue to support the
development of a strong revenue pipeline.
Distribution & Logistics
2014 2013 Change
GBPm GBPm
Turnover 153.2 155.2 (1%)
Operating expenses (149.6) (150.5) 1%
-------- -------- -----------
Operating profit 3.6 4.7 (23%)
Net financing costs (0.3) (0.3) -
Profit before tax 3.3 4.4 (25%)
Net financing costs 0.3 0.3 -
Depreciation 2.1 2.1 -
-------- -------- -----------
Distribution & Logistics EBITDA 5.7 6.8 (16%)
======== ======== ===========
Operating profit margin 2.3% 3.0% (0.7 ppts)
Profit before tax margin 2.2% 2.8% (0.6 ppts)
EBITDA margin 3.7% 4.4% (0.7 ppts)
-------- -------- -----------
KPIs
2014 2013 Change
Warehouse space (square feet) 847,000 847,000 -
Number of tractor units in operation 450 450 -
Number of trailer units in operation 640 640 -
Miles per gallon 8.9 8.7 2%
Fleet mileage per annum 42.6m 43.4m (2%)
Average staff numbers 1,388 1,335 4%
For further information contact:
Dart Group PLC Tel: 0113 238 7444
Philip Meeson, Group Chairman and Chief
Executive
Gary Brown, Group Chief Financial Officer
Smith & Williamson Corporate Finance Tel: 020 7131 4000
Limited
Nominated Adviser
Andy Pedrette / David Jones
Canaccord Genuity - Joint Broker Tel: 020 7523 8000
Peter Stewart / Mark Whitmore
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Christopher Hardie
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Richard Oldworth
COnsolidated group income statement
for the year ended 31 March 2014
Unaudited Audited results
results for for the year
the year ended
ended 31 March
31 March 2013
2014
GBPm GBPm
Turnover 1,120.2 869.2
Net operating expenses (1,071.0) (831.3)
---------------- --------------------
Operating profit 49.2 37.9
Finance income 1.4 1.6
Finance costs (1.4) (1.0)
Revaluation of derivative hedges (3.3) 2.0
Revaluation of foreign currency
balances (3.8) -
Net financing costs (7.1) 2.6
Profit before taxation 42.1 40.5
Taxation (6.2) (9.3)
---------------- --------------------
Profit for the year
(all attributable to equity shareholders
of the parent) 35.9 31.2
================ ====================
Earnings per share
---------------- --------------------
* basic 24.68 p 21.73 p
* diluted 24.28 p 21.44 p
---------------- --------------------
Consolidated group statement of comprehensive income
for the year ended 31 March 2014
Year ended Year ended
31 March 31 March
2014 Unaudited 2013 Audited
GBPm GBPm
Profit for the year 35.9 31.2
Effective portion of fair value movements
in cash flow hedges (33.8) (3.3)
Net change in fair value of effective
cash flow hedges transferred to profit (16.9) -
Taxation on components of other comprehensive
income 11.5 0.6
---------------- --------------
Other comprehensive income and expense
for the period, net of taxation (39.2) (2.7)
Total comprehensive income for the
period all attributable to owners of
the parent (3.3) 28.5
================ ==============
Consolidated balance sheet
at 31 March 2014
Unaudited Audited
2014 2013
GBPm GBPm
Non-current assets
Goodwill 6.8 6.8
Property, plant and equipment 291.6 269.1
Derivative financial instruments 0.4 1.0
298.8 276.9
----------- -----------
Current assets
Inventories 3.1 1.3
Trade and other receivables 285.9 226.2
Derivative financial instruments 1.4 22.2
Money market deposits 52.5 30.0
Cash and cash equivalents 211.2 190.9
----------- -----------
554.1 470.6
----------- -----------
Total assets 852.9 747.5
----------- -----------
Current liabilities
Trade and other payables 107.0 92.0
Deferred revenue 484.5 407.1
Borrowings 0.8 0.8
Provisions 2.4 2.1
Derivative financial instruments 35.0 4.2
----------- -----------
629.7 506.2
----------- -----------
Non-current liabilities
Other non-current liabilities 10.7 11.4
Borrowings 9.0 7.7
Derivative financial instruments 2.2 0.3
Deferred tax liabilities 19.7 35.3
----------- -----------
41.6 54.7
Total liabilities 671.3 560.9
Net assets 181.6 186.6
=========== ===========
Shareholders' equity
Share capital 1.8 1.8
Share premium 11.4 10.7
Cash flow hedging reserve (26.8) 12.4
Retained earnings 195.2 161.7
Total shareholders' equity 181.6 186.6
=========== ===========
consolidated group cash flow statement
for the year ended 31 March 2014 Unaudited Audited
2014 2013
Cash flows from operating activities GBPm GBPm
Profit on ordinary activities before
taxation 42.1 40.5
Adjustments for:
Finance income (1.4) (1.6)
Finance costs 1.4 1.0
Revaluation of derivative hedges 3.3 (2.0)
Foreign exchange losses 3.8 -
Depreciation 60.7 45.5
Equity settled share based payments 0.4 0.4
Operating cash flows before movements
in working capital 110.3 83.8
(Increase) / decrease in inventories (1.8) 0.1
Increase in trade and other receivables (59.7) (108.5)
Increase in trade and other payables 10.3 29.2
Increase in deferred revenue 77.5 150.3
Increase in provisions 0.3 0.4
Cash generated from operations 136.9 155.3
Interest received 1.4 1.4
Interest paid (1.4) (1.1)
Income taxes paid (6.1) (5.3)
Net cash from operating activities 130.8 150.3
---------- --------
Cash flows used in investing activities
Purchase of property, plant and equipment (83.5) (79.7)
Proceeds from sale of property, plant 0.2 -
& equipment
Net (increase) / decrease in money
market deposits (22.5) 47.0
Net cash used in investing activities (105.8) (32.7)
---------- --------
Cash flows from financing activities
Repayment of borrowings (8.7) (0.8)
New loans advanced 10.0 -
Proceeds on issue of shares 0.7 0.9
Equity dividends paid (2.8) (2.1)
Net cash used in financing activities (0.8) (2.0)
---------- --------
Effect of foreign exchange rate changes (3.9) 0.3
---------- --------
Net increase in cash in the year 20.3 115.9
Cash and cash equivalents at beginning
of year 190.9 75.0
Cash and cash equivalents at end
of year 211.2 190.9
========== ========
Consolidated group statement of changes in equity
for the year ended 31 March 2014
Share Share Cash flow Retained Total
capital premium hedging earnings reserves
reserve
GBPm GBPm GBPm GBPm GBPm
--------- --------- ---------- ---------- ----------
Audited as at 1 April
2012 1.8 9.8 15.1 132.2 158.9
Total comprehensive
income for the year - - (2.7) 31.2 28.5
Issue of share capital - 0.9 - - 0.9
Dividends paid in the
year - - - (2.1) (2.1)
Share based payments - - - 0.4 0.4
Audited as at 31 March
2013 1.8 10.7 12.4 161.7 186.6
Total comprehensive
income for the year - - (39.2) 35.9 (3.3)
Issue of share capital - 0.7 - - 0.7
Dividends paid in the
year - - - (2.8) (2.8)
Share based payments - - - 0.4 0.4
Unaudited as at 31
March 2014 1.8 11.4 (26.8) 195.2 181.6
========= ========= ========== ========== ==========
Notes to the consolidated financial statements
for the year ended 31 March 2014
1. General information
The Group's Financial Statements consolidate the Financial
Statements of Dart Group PLC and its subsidiaries. The Group's
Financial Statements have been prepared and approved by the
Directors in accordance with International Financial Reporting
Standards ('IFRS') as adopted by the European Union ('Adopted
IFRS').
2. Basis of preparation
The financial statements have been prepared under the historical
cost convention except for all derivative financial instruments
that have been measured at fair value.
Whilst the financial information included in this preliminary
announcement has been computed in accordance with IFRS as adopted
by the European Union, this announcement does not itself contain
sufficient information to comply with IFRS. The Company expects to
publish full financial statements in July 2014.
The Group uses forward foreign currency contracts 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 following
the need for the Group to join the EU Emissions Trading Scheme from
1 January 2012. Such derivative financial instruments are stated at
fair value.
Going concern
For the purposes of their assessment of the appropriateness of
the preparation of the Group's accounts on a going concern basis,
the Directors have considered the current cash position, the
availability of bank facilities, the Group's net current liability
position - driven principally by continued investment in our
aircraft fleet - and forecasts of future trading through to 31
March 2017, including performance against financial covenants and
the assessment of principal areas of uncertainty and risk.
Having considered the points outlined above, the Directors have
a reasonable expectation that the Company and the Group will be
able to operate within the level of available facilities and cash
for the foreseeable future. As such, they continue to adopt the
going concern basis in preparing the financial statements for the
year ended 31 March 2014.
3. Segmental reporting
Business segments
The Chief Operating Decision Maker ("CODM") is responsible for
the overall resource allocation and performance assessment of the
Group. The Board of Directors approves major capital expenditure,
assesses the performance of the Group and also determines key
financing decisions. The Group considers that the Board of
Directors is the CODM.
The Group's operating segments have been identified based on the
internal reporting information provided to the CODM in order for
the CODM to formulate allocation of resources to segments and
assess their performance. From such information, Leisure Airline
and Package Holidays (working progressively closer together as one
Leisure Travel business) and the Distribution & Logistics
business have been determined to represent operating segments.
The Leisure Airline and Package Holidays businesses are based on
serving our customers' demand for package holidays in, and flights
to, high volume leisure destinations in the Mediterranean, the
Canary Islands and great Leisure Cities across Europe. Resource
allocation decisions are based on our entire route network and, in
the case of Leisure Airline, the deployment of the entire aircraft
fleet.
The Distribution & Logistics business is run on the basis of
the evaluation of distribution centre-level performance data.
However, resource allocation decisions are made based on the entire
distribution network. The objective in making resource allocation
decisions is to maximise the segment results rather than individual
distribution centres within the network.
Group eliminations include the removal of seat sales by Leisure
Airline to the Package Holidays business and the removal of
intersegment asset and liability balances.
Following the identification of the operating segments, the
Group has assessed the similarity of the characteristics of the
operating segments. Given the different performance targets,
customer bases and operating markets of each of the operating
segments it is not currently appropriate to aggregate the operating
segments for reporting purposes and therefore all three of the
identified operating segments are disclosed as reportable segments
for the year ended 31 March 2014:
-- Leisure Airline, comprising the Group's scheduled leisure 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.
The Board assesses the performance of each segment based on
operating profit, profit before and after tax, and EBITDA. 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.
Segment results, assets and liabilities include items directly
attributable to a segment, as well as those that can be allocated
on a reasonable basis. No customer represents more than ten percent
of the Group's revenue.
Distribution Leisure Package Group Total
& Logistics Airline Holidays eliminations
GBPm GBPm GBPm GBPm GBPm
Unaudited year ended
31 March 2014
Turnover 153.2 643.1 496.2 - 1,292.5
Inter-segment turnover - - - (172.3) (172.3)
-------- --------- ---------- -------------- ---------
Turnover 153.2 643.1 496.2 (172.3) 1,120.2
EBITDA 5.7 89.6 14.6 - 109.9
Operating profit 3.6 31.2 14.4 - 49.2
Finance income - 0.9 0.5 - 1.4
Finance costs (0.3) (1.1) - - (1.4)
Revaluation of derivative
hedges - (3.3) - - (3.3)
Revaluation of foreign
currency balances - (3.8) - - (3.8)
Profit before taxation 3.3 23.9 14.9 - 42.1
Taxation (0.6) (2.3) (3.3) - (6.2)
-------- --------- ---------- -------------- ---------
Profit after taxation 2.7 21.6 11.6 - 35.9
======== ========= ========== ============== =========
Assets and liabilities
Segment assets 71.0 502.7 736.6 (457.4) 852.9
Segment liabilities (32.7) (381.3) (714.7) 457.4 (671.3)
-------- --------- ---------- --------------
Net assets 38.3 121.4 21.9 - 181.6
======== ========= ========== ============== =========
Other segment information
Property, plant
and equipment additions 1.0 82.3 0.2 - 83.5
Depreciation, amortisation
and impairment (2.1) (58.4) (0.2) - (60.7)
Share based payments (0.1) (0.2) (0.1) - (0.4)
Audited year ended
31 March 2013
Turnover 155.2 556.2 244.8 - 956.2
Inter-segment turnover - - - (87.0) (87.0)
-------- --------- ---------- -------------- ---------
Turnover 155.2 556.2 244.8 (87.0) 869.2
EBITDA 6.8 69.8 6.8 - 83.4
Operating profit 4.7 26.7 6.5 - 37.9
Finance income - 1.3 0.3 - 1.6
Finance costs (0.3) (0.7) - - (1.0)
Revaluation of derivative
hedges - 2.0 - - 2.0
Profit before taxation 4.4 29.3 6.8 - 40.5
Taxation (1.4) (6.2) (1.7) - (9.3)
-------- --------- ---------- -------------- ---------
Profit after taxation 3.0 23.1 5.1 - 31.2
======== ========= ========== ============== =========
Distribution Leisure Package Group Total
& Logistics Airline Holidays eliminations
GBPm GBPm GBPm GBPm GBPm
Audited year ended
31 March 2013
Assets and liabilities
Segment assets 72.9 535.5 527.4 (388.3) 747.5
Segment liabilities (37.6) (394.3) (517.3) 388.3 (560.9)
-------- --------- ---------- --------------
Net assets 35.3 141.2 10.1 - 186.6
======== ========= ========== ============== =========
Other segment information
Property, plant
and equipment additions 0.9 78.7 0.1 - 79.7
Depreciation, amortisation
and impairment (2.1) (43.1) (0.3) - (45.5)
Share based payments (0.1) (0.2) (0.1) - (0.4)
4. Earnings per share
Unaudited Audited
2014 2013
No. No.
Basic weighted average number of shares
in issue 145,300,720 143,618,691
Dilutive potential ordinary shares: employee
share options 2,402,809 1,926,331
Diluted weighted average number of shares
in issue 147,703,529 145,545,022
============ ============
Unaudited Audited
year to year to
31 March 31 March
2014 2013
Basis of calculation - earnings (basic and
diluted) GBPm GBPm
Profit for the purposes of calculating basic
and diluted earnings 35.9 31.2
Earnings per share - Total
- basic 24.68p 21.73p
- diluted 24.28p 21.44p
5. Financial information
The financial information set out above does not constitute the
Company's statutory accounts for the years ended 31 March 2014 or
31 March 2013. The financial information for 2013 is derived from
the statutory accounts for the year ended 31 March 2013 which have
been delivered to the Registrar of Companies. The auditor has
reported on the year ended 31 March 2013 accounts; their report
was:
i. unqualified;
ii. did not include a reference to any matters to which the
auditor drew attention by way of emphasis without qualifying their
report; and
iii. did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The statutory accounts for the year ended 31 March 2014 will be
finalised on the basis of the financial information presented by
the directors in this preliminary announcement and will be
delivered to the Registrar of Companies in due course.
6. Annual report and accounts
The 2014 Annual Report and Accounts (together with the Auditor's
Report) will be posted to shareholders in late July 2014. The
Annual General Meeting will be held on 4 September 2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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