RNS No 4113e
DART GROUP PLC
25th June 1998
Dart Group PLC ("Dart Group" or "the Group")
Preliminary statement of results
for the year ended 31 March 1998
CHAIRMANS STATEMENT
I am pleased to report a year of good progress for the Group.
Profit before tax for the year to 31 March 1998 has risen to
#5.13m (1997 - #4.64m) on turnover of #87.8m (1997 -
#72.1m). Earnings per share were 22.4p (1997 - 19.3p). Our
policy is to increase dividends in proportion to the growth in
earnings per share. Having reviewed the projected capital
expenditure requirements of the business the Board is pleased
to recommend a final dividend of 5.0p (1997 - 4.4p) making a
total dividend of 17.3p for the year (1997 - 6.5p). The
dividend will be payable on 27 August 1998 to shareholders on
the register on 10 July 1998.
During the year the Group purchased two further Airbus A300B4s
for conversion, from passenger aircraft into freighters, by
Daimler-Benz Aerospace Airbus (DASA) in Dresden, Germany.
The first of these aircraft was delivered to us on completion
of the conversion on 27 April 1998. This aircraft, and our
first A300 were financed by aircraft mortgages over a five
year term, providing #6.6 million cash at 31 March 1998, to
enable the Group to take advantage of future commercial
opportunities. Net gearing at the year end was 82% with
interest covered 8 times.
The Group has two operating divisions - Distribution and
Aviation Services.
Distribution Division
The divisions primary business is the operation of a high
quality distribution system for fresh produce and flowers to
supermarkets and wholesale markets throughout the UK mainland
and to Northern Ireland and the Channel Islands.
The two companies in this division, Fowler Welch and Channel
Express (CI), based respectively in Spalding, Lincolnshire,
and the Channel Islands, have benefited from the long-term
continuity of experienced management under whose guidance they
have expanded, both organically and by acquisition. The
distribution of fresh produce and flowers is an attractive
sector in which major transportation groups are also keen to
compete. However, the level of organisation and "hands on"
management required to meet the demanding standards of our
supermarket, grower and wholesaler customers is not easily
attained. It is pleasing to note our customers appreciation
of the intricate planning and operation needed to keep a
continuous flow of time sensitive temperature-controlled
produce delivered into their distribution centres in
accordance with their stringent quality requirements.
The division has, therefore, confidently expanded its network
through the acquisition of producer-owned distribution fleets
in Cambridgeshire and has agreed to lease a purpose designed
distribution centre at Portsmouth to serve its Channel Islands
and southern England customers and to handle growing volumes
of imported produce. This 40,000 sq.ft. temperature
controlled facility is scheduled for completion by the end of
1998 and will bring the temperature controlled facilities
operated by the division to over 300,000 sq.ft.
Aviation Services Division
The companies in the Aviation Services Division are our cargo
airline, Channel Express (Air Services), and Benair Freight
International, which manages and forwards freight
internationally by air, sea and road. The world air cargo
market is expected to more than triple over the next 20 years.
It has grown at an average rate of 7.2% per year from 1986 to
1997 and the annual average forecast growth to 2017 is 6.5%.
We are determined that our two specialist cargo companies will
take advantage of the excellent opportunities in this market.
Channel Express (Air Services) operates a fleet of 15 cargo
aircraft which fly throughout Europe on behalf of express
parcel companies, postal authorities, forwarders and other
airlines. In 1996 the company was the first to recognise
the potential for converting the many "parked up" Airbus
A300B4 passenger aircraft into freighters and is now operating
two converted A300s, which have been named "Eurofreighters",
with a third due for delivery in July of this year.
Since introducing the Eurofreighter into service, the company
has experienced considerable demand for the type with each of
its aircraft fully committed to operations. To take further
advantage of the potential in this market, therefore, the
Group is presently negotiating the purchase of a further A300
which it expects to deliver to DASA for conversion into a
freighter with re-delivery in the Spring of 1999. We are
confident that the Eurofreighter represents an excellent long-
term investment for the Group.
Our freight management and forwarding company, Benair, has now
completed the recent expansion of its UK office and warehouse
infrastructure and is well positioned for further growth. To
develop the companys full potential a Chief Executive has
been appointed for the first time. The strengthened
management team is concentrating on the opportunities afforded
by Benairs well-established and strong links with the Far
East and North America and its highly specialised business of
importing and distributing tropical and cold water fish
throughout the UK, whilst developing further niche
opportunities afforded by the Groups connections.
I hope, as you read my statement and the following Review of
Operations, you share my confidence in the Group and in its
future. This confidence is very much a reflection of my
appreciation of, and trust in, my management colleagues and
staff. We are fortunate indeed to have experience and
loyalty at all levels in the Group.
Philip Meeson, Chairman
25 June 1998
REVIEW OF OPERATIONS
DISTRIBUTION
Fowler Welch
The benefits from the merger of the Groups UK distribution
companies, Channel Express and Fowler Welch, are being
realised and the past year has seen the business develop and
the distribution network expand under the Fowler Welch name.
The company has been successful in winning additional business
and has developed new, competitive services to existing and
new customers.
Fowler Welchs primary business is the distribution of fresh
produce and flowers on behalf of supermarkets, wholesalers and
growers throughout the UK and the Channel Islands. These
products are delivered into the companys consolidation
centres or are collected from a wide range of leading
suppliers dealing in both home grown and imported produce and
flowers. Loads are then assembled to customer order by
warehouse teams who form an important part of the distribution
process. Nationwide delivery by the experienced force of over
200 drivers is made within hours to supermarkets and wholesale
outlets, ensuring that these highly perishable consignments
are ready for sale in peak condition.
This 24 hours a day, 7 days a week operation is planned and
carried out by a strong, dedicated team of management and
staff who have many years practical experience. Constant
monitoring of the distribution chain is needed in order to
meet critical delivery deadlines and, to facilitate this, all
vehicles are equipped with the latest in-cab communications
systems. A sophisticated IT system, which is presently being
further enhanced to incorporate closer links with customers
on-line networks, supports the operation.
The principal Fowler Welch consolidation centre is situated at
Spalding, Lincolnshire, where a new 55,000 sq.ft. cold store
was opened in October. This brings the amount of temperature-
controlled facilities at this centre to 155,000 sq.ft. Plans
to extend the 20 acre site are under consideration to cater
for further growth.
In the south, the company has agreed to lease a new, purpose-
designed distribution centre on a 4= acre site at Portsmouth,
Hampshire. This is scheduled for completion by 1 January 1999
and will comprise 20 loading bays within 40,000 sq.ft. of
compartmentalised, fully temperature-controlled warehousing
together with 8,000 sq.ft. of offices. When completed, this
distribution centre will, together with the companys existing
facilities at Bournemouth, present opportunities for
substantial business growth in the south, particularly in the
important growing area of West Sussex. It will also be
ideally situated to handle imports of produce arriving through
the ports of Southampton and Portsmouth.
The new Portsmouth distribution centre will bring the amount
of temperature-controlled storage available throughout the
division to over 300,000 sq.ft.
Fowler Welch works very closely with its customers to ensure
that they receive an efficient, cost effective service in this
competitive market. Through its national distribution network,
the company offers its customers a service that meets their
own particular needs and, at the same time, allows them to
benefit from the economies achieved through the consolidation
of consignments in a "shared-user" environment. Features of
this service can include collection from customers premises,
consolidation at one of the companys distribution centres,
rapid cooling of the product, provision of pre-packing
facilities, storage and delivery to any of the UKs multiple
retailers regional distribution centres or some 40 individual
wholesale markets.
Although delivery into regional distribution centres
continues to be Fowler Welchs prime business, increasingly
this is being taken a stage further by re-loading from these
centres with deliveries destined for individual supermarkets.
Linking these "primary" and "secondary" processes optimises
distribution efficiencies and lowers costs for both parties.
It also reduces the number of large vehicles on the roads and
helps the industry meet Government targets for protecting the
environment.
The companys enlarged national distribution network offers
other opportunities to attract return loads on behalf of its
wide customer base, thus maximising revenue earning miles.
In July 1997 and May 1998 respectively, Fowler Welch expanded
its operational base in eastern England when it took over the
distribution work and vehicle fleets of C. Minaar Ltd and
Russell Burgess Ltd. These two Cambridgeshire-based
companies specialise in the pre-packing of locally grown and
imported produce and Fowler Welch has consolidated their
transport operations into its existing network.
Cambridgeshire is one of the countrys most important produce
growing areas and is strategically significant as it gives the
company access to a further source of supply, both locally
grown and imported from the Benelux countries, through the
eastern ports of Harwich and Felixstowe, and worldwide via
Stansted Airport.
To support the expansion of its business, Fowler Welch has
strengthened its operational management giving the
organisation added momentum and providing the necessary
expertise to capitalise on future opportunities in the sector.
Fowler Welch has been an accredited "Investor in People" for
several years and has seen the benefits this brings in
attracting and retaining high calibre staff at all levels. The
company has developed and implemented in-house training
programmes covering a wide variety of skills tailored to the
specific needs of the business and staff performance is
appraised at regular intervals. Quality plays a key role in
providing customer satisfaction and Fowler Welch has for many
years held the ISO9002 quality standard. Supplementary to
this, supermarket customers have their own stringent codes of
high quality practice to which Fowler Welch adheres.
Channel Express (CI)
The Groups Channel Islands based company, Channel Express
(CI), serves the divisions important markets in Guernsey and
Jersey, with its vehicles delivering fresh produce and
flowers to the UK for distribution by Fowler Welch, returning
with a wide range of chilled, frozen and non-perishable
foodstuffs as well as mail, newspapers and general freight.
The two depots on each island are managed by local staff with
many years experience of Channel Islands needs. Channel
Express (CI) is very much an integral part of the Islands
transport infrastructure, both by air, in co-operation with
Channel Express (Air Services), and by sea.
The new Fowler Welch Portsmouth facility will provide a focal
point for the Channel Islands distribution operation.
Produce and flowers will be consolidated under fully
temperature-controlled conditions and consignments will enter
the Fowler Welch distribution chain more quickly for earlier
delivery to all UK destinations. This will allow the company
to improve the service provided to Channel Island growers
whilst, at the same time, the centres proximity to the port
of entry will ensure the operations cost effectiveness.
It is the intention of the distribution division to continue
to build upon its expanding infrastructure, developing
relationships with both the major multiple retailers and its
other customers through the expansion of its national
distribution network. It is expected that new commercial
opportunities will take the division into other strategic
locations during the coming year but, in particular, it is
believed that the new southern facility will offer
considerable potential for future growth.
AVIATION SERVICES
Channel Express (Air Services)
The Groups cargo airline, Channel Express (Air Services),
operates 15 aircraft on behalf of express parcel companies,
postal authorities, freight forwarders and other airlines.
Additionally the company operates many ad hoc charter flights
that are often arranged at short notice to meet the needs of
customers facing delays in their supply chains. The fleet
currently consists of eight Fokker F27s, four Lockheed
Electras, two Airbus A300 "Eurofreighters" and the remaining
Dart Herald which is due for retirement in March 1999.
All aircraft are owned by the Group except for one Fokker F27
and one Lockheed Electra, which are leased from other
operators. There are no plans to increase the number of F27s
or Electras owned by the Group.
The Groups aircraft offer a range of payloads: 6 tonnes
(Herald and F27s); 15 tonnes (Electras) and 45 tonnes
(Eurofreighters) enabling Channel Express (Air Services) to
offer increasing capacity to meet its customers requirements
as their businesses grow. Typically aircraft are contracted
by customers for periods of between one and three years and
fly scheduled feeder services between major cities and their
distribution centres. Contracts are often renewed for
further periods, for example, an Electra has operated for an
express parcel company on the Shannon-Dublin-Cologne route for
the past five years.
The companys contracts with its customers normally allow it
to pass on increases in third party costs such as fuel, air
traffic and landing fees, thus minimising these areas of risk.
Channel Express (Air Services) customers demand high
standards of service and reliability as it is essential that
aircraft arrive at the customers hubs within a tight time
frame so that cargoes may be sorted rapidly for redistribution
and thereafter continue their journeys to meet delivery
deadlines.
Customers contract Channel Express (Air Services) to operate
on their behalf either because they have decided not to
operate aircraft themselves or because regulatory restrictions
preclude, or restrict, them from operating aircraft in
Europe.
Channel Express (Air Services) frequently operates aircraft
that have been converted into freighters following their
retirement from passenger service. The high aircraft
utilisation of passenger operations dictates that direct
operating costs (such as fuel and maintenance) are kept under
constant review. Competitive operating costs are often
achieved by these airlines upgrading their fleets with newer
generation aircraft. The lower utilisation of intra European
cargo operations places a greater emphasis on fixed costs
(such as depreciation and finance charges) often leading to
the selection of aircraft that have been succeeded in
passenger airline fleets but which are suitable for
conversion into freighters.
Capital cost, suitability for cargo operation and
environmental considerations are all important factors in
Channel Express (Air Services) selection of aircraft types
for passenger to freighter conversion. Noise considerations
are particularly important as many of the companys operations
take place at night.
Apart from European legislation, which requires all aircraft
not meeting its noise requirements to be phased out of service
by 2002, individual airports also increasingly limit the types
of aircraft they are willing to accept at night - often
following pressure from local residents. With the exception
of the one remaining Dart Herald, all of the companys
aircraft have International Civil Aircraft Organisation
Chapter Three noise compliance certificates and are expected
to be acceptable for the foreseeable future for night-time
operations at European airports.
In view of the growth being experienced in the air cargo
market, in February 1996, after considerable research, the
Group purchased a 45 tonne capacity Airbus A300B4 aircraft,
which had been retired from passenger service, and placed the
first contract of its type for the A300s conversion into a
freighter. "The Eurofreighter" entered revenue service on 1
August 1997, flying during the day for a European freight
forwarder, at night for an express parcel company and at the
weekend for British Airways World Cargo from Stansted to Tel
Aviv. Following the operational and commercial success of
this first conversion, during the second and third quarters of
1997, the Group purchased two further A300B4s, the first of
these which entered revenue service, following its conversion,
in May 1998 and the second is due for re-delivery in July
1998.
Each of the companys Eurofreighters has been contracted to
operate European cargo services and it is a significant
reflection of the Groups skills that the types entry into
commercial service has been so successfully completed. Key to
this success has been the contribution of Channel Express
(Air Services) Commercial, Administration, Operations and
Engineering Departments. In order to operate the new type
over 48 aircrew and 20 engineers have been internally promoted
or recruited, and trained over the past 20 months. The
companys policy is to promote from within wherever possible
and 65% of the Eurofreighters operational appointments came
from internal applicants.
To support future Eurofreighter operations, in January of this
year, the Group purchased two A300B2s, an earlier version of
the aircraft having commonality of engines and many major
components. These aircraft were purchased to provide spare
parts and engines for the Eurofreighter fleet and, following
their dismantling, the company is in an extremely strong
position to support the operation of both its own aircraft
and those of other companies which are also now purchasing
A300s and contracting their conversions.
The Group plans to purchase and convert further A300B4s in the
future. It is expected that the F27s and Electras will
operate for a further five to ten years thus giving Channel
Express (Air Services) both continuity of operations and
growth in future capacity.
Benair Freight International
Benair, the Groups freight forwarder, manages and arranges
the transportation of its customers freight by air, sea and
road from its modern office and warehouse facilities at
Heathrow, Manchester and East Midlands Airports. The companys
wholly-owned subsidiary in Singapore and strong relationship
in Hong Kong, together with strategically located overseas
agents and partners, enable Benair to provide a high quality
freight management service to its customers.
During the year a review was undertaken of the companys
operations and development plans with the aim of defining the
main areas for growth in the medium term in order to make the
company a more significant contributor to the Groups revenues
and profits. This review is nearing completion by the newly
appointed Chief Executive who has previous experience of
business development in niche areas with two major forwarders.
In addition to its general freight forwarding activities,
Benair already has a significant niche business that requires
specialist knowledge and handling - the importation of cold
water and tropical fish for distribution to UK wholesalers.
This is a particular expertise that the company has developed
over several years and, despite its strong position in this
specialist market, it is believed that there are further
opportunities for growth.
Benairs business complements the Groups other operations and
provides it with further opportunities to exploit the rapidly
growing cargo market both through its own development
programmes and by exploiting intra Group opportunities. The
company will be given every possible backing to build it into
a substantial business.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 March 1998
1998 1997
(audited) (audited)
#000 #000
TURNOVER 87,809 72,119
Net operating expenses (82,174) (67,585)
_______ ______
OPERATING PROFIT 5,635 4,534
Profit on sale of fixed assets 57 64
Net interest (payable)/receivable (567) 40
_______ _____
PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION 5,125 4,638
Taxation (1,522) (1,540)
_______ _____
PROFIT ON ORDINARY ACTIVITIES
AFTER TAXATION 3,603 3,098
Dividends (1,178) (1,045)
_______ _____
RETAINED PROFIT FOR THE YEAR 2,425 2,053
_______ _____
EARNINGS PER SHARE (Note 2) 22.4p 19.3p
_____ ____
STATEMENT OF TOTAL
RECOGNISED GAINS AND LOSSES
1998 1997
#000 #000
Profit on ordinary activities after
taxation 3,603 3,098
Foreign exchange loss on foreign equity
investment
(57) (44)
_______ _____
3,546 3,054
_______ ______
CONSOLIDATED BALANCE SHEET
at 31 March 1998
1998 1997
(audited) (audited)
#000 #000 #000 #000
FIXED ASSETS
Tangible assets 38,959 21,686
Investments 106 106
_______ _____
39,065 21,792
CURRENT ASSETS
Stock 1,478 777
Debtors 12,433 12,447
Cash at bank and in hand 6,597 3,320
_______ _____
20,508 16,544
CURRENT LIABILITIES
CREDITORS: amounts falling due
within one year (19,281) (16,212)
_______ ______
NET CURRENT ASSETS 1,227 332
_______ _____
TOTAL ASSETS LESS CURRENT
LIABILITIES 40,292 22,124
CREDITORS: amounts falling due
after more than one year (18,277) (4,013)
PROVISION FOR LIABILITIES AND
CHARGES (5,256) (3,777)
_______ _____
(23,533) (7,790)
_______ _____
16,759 14,334
_______ __ ___
CAPITAL AND RESERVES
Called up share capital 1,614 1,608
Share premium account 4,530 4,479
Profit and loss account 10,615 8,247
_______ _____
SHAREHOLDERS FUNDS -
equity interests 16,759 14,334
_______ __ ___
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 March 1998
1998 1997
(audited) (audited)
#000 #000 #000 #000
NET CASH INFLOW FROM OPERATING
ACTIVITIES 9,360 6,338
RETURNS ON INVESTMENT AND
SERVICING OF FINANCE
Interest paid: bank and other
loans (651) (138)
Interest element of finance
lease rental payments (74) (74)
Interest received: bank 158 252
____ ____
(567) 40
TAXATION
Corporation and advance
corporation tax paid (1,037) (1,400)
CAPITAL EXPENDITURE AND FINANCIAL
INVESTMENT
Purchase of tangible fixed
assets (17,894) (8,484)
Disposal of tangible fixed
assets 160 136
______ _____
(17,734) (8,348)
EQUITY DIVIDENDS PAID (1,078) (978)
______ ______
CASH OUTFLOW BEFORE FINANCING (11,056) (4,348)
FINANCING
Ordinary share capital issued 57 38
Other loans repaid (401) (273)
Bank loans repaid (284) (921)
Other loans advanced 14,250 2,083
Bank loans advanced 1,000 2,400
Capital elements of finance
lease rental payments (289) (373)
_______ _______
14,333 2,954
_______ _______
INCREASE/DECREASE IN 3,277 (1,394)
CASH IN THE YEAR _______ _______
NOTES
1. The financial information for the years ended 31 March 1997
and 1998 do not constitute statutory accounts, as defined in
Section 240 of the Companies Act 1985, but are based on the
statutory accounts for the years then ended. Statutory
accounts for the year ended 31 March 1997, on which the
auditors issued an unqualified opinion pursuant to Section 235
of the Companies Act 1985, have been filed with the Registrar
of Companies. Statutory accounts for the year ended 31 March
1998, on which the auditors issued an unqualified opinion
pursuant to Section 235 of the Companies Act 1985, will be
filed with the Registrar of Companies in due course.
2. Earnings per share are calculated on the profit on ordinary
activities after taxation for the financial year and on
16,101,240 (1997: 16,049,066) shares, being the weighted
average number of shares in issue during the year. The
potential dilution of earnings per share from the exercise of
the share options is not material.
3. The proposed final dividend of 5.0 pence (net) per share
will, if approved, be payable on 27 August 1998 to
shareholders on the Companys register at the close of
business on 10 July 1998.
4. The 1998 Annual Report and Accounts (together with the
Auditors Report) will be posted to shareholders by 14 July
1998.
_______________________________
END
FR MLGZVLDMLRMM
Jet2 (LSE:JET2)
Historical Stock Chart
From Jun 2024 to Jul 2024
Jet2 (LSE:JET2)
Historical Stock Chart
From Jul 2023 to Jul 2024
