TIDMJET2
RNS Number : 3701U
Jet2 PLC
23 November 2023
Jet2 plc
Interim Results
Jet2 plc , the Leisure Travel group ("the Group" or "the
Company") announces its unaudited interim results for the half year
ended 30 September 2023.
Group financial highlights Half year ended Half year ended Half year end
30 September 30 September change
2023 2022
Unaudited Unaudited
-------------------------------------------- ---------------- ---------------- --------------
Revenue GBP4,407.4m GBP3,567.6m 24%
============================================ ================ ================ ==============
Operating profit GBP617.0m GBP516.6m 19%
============================================ ================ ================ ==============
Profit before FX revaluation and taxation* GBP664.6m GBP505.0m 32%
============================================ ================ ================ ==============
Profit before taxation GBP660.5m GBP450.7m 47%
============================================ ================ ================ ==============
Profit for the period after taxation GBP496.0m GBP356.0m 39%
============================================ ================ ================ ==============
Basic earnings per share 231.0p 165.9p 39%
============================================ ================ ================ ==============
Interim dividend per share 4.0p 3.0p 33%
-------------------------------------------- ---------------- ---------------- --------------
* Further information on the calculation of this measure can be
found in Note 3.
-- Group operating profit increased by 19% to GBP617.0m (2022:
GBP516.6m) and Group profit before foreign exchange revaluation
and taxation increased by 32% to GBP664.6m (2022: GBP505.0m).
-- Against Summer 2022, seat capacity increased 7% and the business
achieved an average load factor of 90.7% (2022: 90.7%) with
higher margin per passenger Package Holiday mix of total
departing passengers up 4.9ppts to 70.8% (2022: 65.9%).
-- Flight-only net ticket yield per passenger sector at GBP124.09
(2022: GBP105.00) was 18% higher than the comparable period;
the average price of a Jet2holidays package holiday also
increased 11% to GBP855.
-- Our operations were directly impacted by the broader disruption
caused by the National Air Traffic Services ("NATS") failure,
Rhodes wildfires and flooding in Skiathos which resulted
in approximately GBP14.0m of lost profitability.
-- Total cash balance (including money market deposits) was
GBP3,214.6m, an increase of 14% (2022: GBP2,830.7m). Our
Own Cash* (excluding customer deposits) of GBP2,121.2m increased
by 8% (2022: GBP1,968.6m).
-- For the Winter 2023/24 season, against a 21% increase in
on sale seat capacity to 4.49m, the higher margin per passenger
Package Holiday mix of departing passengers is currently
up by 2.6ppts. Although bookings have been a little slower
in recent weeks with average load factors currently 1.3ppts
down on Winter 2022/23 at the same point, average pricing
to date remains robust.
-- We are currently on track to deliver Group profit before
FX revaluation and taxation for the year ending 31 March
2024 of between GBP480m and GBP520m, in line with our previous
guidance.
-- Looking ahead, current seat capacity for Summer 2024 at 17.19m
seats is approximately 12% higher than Summer 2023. Bookings
and pricing at this early stage are encouraging, with average
load factors 2.0ppts ahead of Summer 2023 at the same point.
-- We know that many of our Customers prioritise their hard-earned
holidays over other areas of discretionary spend and that
they truly cherish their time away from our Rainy Island
and want to be properly looked after throughout their holiday
experience. As a result, we remain confident that as a Customer
First , much trusted holiday provider, they will continue
to travel with us to the sun spots of the Mediterranean,
the Canary Islands and to European Leisure Cities.
Analyst and Investor call
The management team will host an investor and analyst conference
call at 9.00am UK time, on Thursday, 23rd November 2023. For
dial-in details for the conference call, please contact Buchanan
Communications in advance to register: Jet2@buchanan.uk.com
Results for the half year
In what has proven to be a strong first half of the financial
year, Group operating profit increased by 19% to GBP617.0m (2022:
GBP516.6m) and Group profit before foreign exchange revaluation and
taxation increased by 32% to GBP664.6m (2022: GBP505.0m).
Despite the challenging economic environment, the popularity,
resilience and flexibility of our holiday products were reinforced,
as we capitalised on sustained though later customer demand, in
particular for our end-to-end package holidays, with pricing
remaining robust.
For the reporting period, seat capacity increased 7% against
Summer 2022 with Jet2.com flying 11.97m passenger sectors (2022:
11.20m) and achieving an average load factor of 90.7% (2022:
90.7%). Pleasingly, higher margin per passenger Package Holiday mix
of total departing passengers was up 4.9ppts against Summer 2022 to
70.8% (2022: 65.9%).
The Group commits considerable investment to be well prepared
for its summer operations and this year was no different, as we
welcomed over 2,500 new colleagues since 31 March 2023, bringing
the total number to over 15,000 at peak summer. All have been
comprehensively trained in the company's 'Take Me There' values (Be
Present; Create Memories; Take Responsibility; and Work As One
Team), which are of paramount importance in upholding our
award-winning customer service standards.
Our Customer First ethos means we endeavour to embed sufficient
resilience into our operations, including but not limited to,
standby aircraft and crews, generous amounts of in-resort customer
helpers, plus responsive 'go teams', which enable us to effectively
navigate unforeseen events such as those experienced this summer in
Rhodes (wildfires) and Skiathos (flooding), the technological
systems failure at NATS, and the record number of air traffic
control strikes across Europe. This proactive approach meant we
were able to act swiftly to commit the necessary resources to
support our Customers during these incidents with our Colleagues
responding admirably. As always, the Board is hugely appreciative
of all our Colleagues' immense efforts and support, which enabled
Jet2.com and Jet2holidays to fulfil the dreams of so many
Customers, taking them on their well-deserved and eagerly
anticipated holidays.
As is typical for the Group, losses are to be expected in the
second half of the financial year, as we continue to invest in:
additional aircraft; marketing to ensure we optimise our pre-Summer
2024 forward booking position; retaining increasing numbers of
colleagues through the winter months to ensure appropriate
operational resilience ahead of next summer; and attracting new
colleagues in readiness for further expansion of our exciting
package holiday and flight-only offerings, including at our new
base at Liverpool John Lennon Airport where operations commence in
late March 2024.
Interim Dividend
Basic earnings per share increased to 231.0p (2022: 165.9p) and
in view of the current full year outlook and the Board's continued
confidence in the Group's prospects, it has decided to pay an
interim dividend of 4.0p per share (2022: 3.0p). The dividend will
be paid on 2 February 2024 to shareholders on the register at 29
December 2023, with the ex-dividend date being 28 December
2023.
Post reporting date events
We continually challenge ourselves to enhance our customer
focused product proposition and as a result, we made the bold, but
exciting strategic decision to take control of our critical
in-flight retail operations. This move was driven by the goal of
not only seamlessly providing the in-flight service our Customers
have come to expect and enjoy, but also over time delivering an
improved, bespoke onboard retail experience and optimising revenue
potential.
Consequently, on 18 October 2023, we were delighted to
officially open our Retail Operations Centre ("ROC"), the first of
its kind in the UK aviation industry, which will set new standards
for Customer First service, efficiency and security. This 150,000
square foot facility, located in Middlewich, Cheshire, will act as
a centre to stock, manage and distribute millions of in-flight
retail products for customers to enjoy on their well-deserved
leisure flights. The products being managed include drinks and
ambient food that can either be pre-ordered or which feature in our
in-flight menu, as well as products that can be bought from the
onboard shop, such as fragrances, beauty products, gifts and
duty-free.
Fully stocked in-flight service carts will be distributed to our
UK airport bases by Wincanton Logistics in a fleet of Jet2.com and
Jet2holidays branded trailers, with Gate Gourmet acting as our new
'Last Mile Provider', to load the service carts airside. The ROC
facility employs leading edge x-ray scanners and security measures
and given the nature of the operation, it has undergone thorough
examination to ensure it complies with relevant regulations and has
been approved by the UK Civil Aviation Authority.
As a result of the opening, up to 300 new jobs will be created.
We are thrilled to welcome our new colleagues and look forward to
them playing a critical role as we continue to grow.
The Board
Following the announcement on 6 July 2023 of Philip Meeson's
intention to step down as Executive Chairman, the Board
collectively and carefully considered the qualities, skillset and
experience required of a new Non-Executive Chairman. Of particular
importance was the need to ensure a seamless leadership transition
together with the requirements to support the Company's continued
growth ambitions, uphold its established values of People, Service,
Profits and contribute to its long-term success in continuing to
deliver a Customer First experience.
Consequently, it was agreed that the natural candidate for the
role should be the Company's existing Senior Independent
Non-Executive Director, Robin Terrell, with Philip standing down
from the Board from 5 September 2023 and moving to the position of
Founder & Adviser, thus allowing the Company to continue to
draw on his wisdom and experience from leading the Group over the
last four decades as appropriate.
In further developments to the Board, we were also pleased to
welcome Simon Breakwell and Angela Luger as new independent
Non-Executive Directors during the period and look forward to them
contributing to the future success of our business.
Sustainability
The Group has continued to implement its Sustainability Strategy
and during the reporting period exercised a further 12 aircraft
options from its order with Airbus. The Group now has 110 firm
ordered Airbus A321/320neo aircraft, which could eventually extend
up to 146 aircraft. These aircraft have reduced fuel consumption
and resultant carbon emissions per seat, plus a much lower noise
footprint against previous generation single aisle aircraft models
and will enable Jet2.com and Jet2holidays to grow more sustainably.
To date, we have taken delivery of the first five aircraft, with a
further six due to arrive next calendar year. Critically this
long-term agreement with Airbus ensures certainty of aircraft
supply well into the next decade.
Furthermore, in December 2023 we will launch the Group's
brand-new hotel sustainability labelling scheme. This scheme will
allow customers and independent travel agents to easily find and
choose from a collection of certified sustainable hotels which meet
Global Sustainable Tourism Council recognised standards.
The Group intends to update its Sustainability Strategy during
the first half of 2024, as we continue to make progress to become
more sustainable at every stage of the customer journey: in the
air, on the ground and in resort. More detailed information on the
Group's Sustainability Strategy can be found at
www.jet2plc.com/sustainability .
Outlook
For the Winter 2023/24 season, against a 21% increase in on sale
seat capacity to 4.49m, the higher margin per passenger Package
Holiday mix of departing passengers is currently up by 2.6ppts.
Although bookings have been a little slower in recent weeks with
average load factors currently 1.3ppts down on Winter 2022/23 at
the same point, average pricing to date remains robust. With over
40% of Winter bookings traditionally made during the January to
March period, we currently remain on track to deliver Group profit
before FX revaluation and taxation for the year ending 31 March
2024 of between GBP480m and GBP520m, in line with our previous
guidance . This remains dependent on no material extraneous events
in the balance of the financial year.
Looking ahead, current seat capacity for Summer 2024 at 17.19m
seats is approximately 12% higher than Summer 2023. Bookings and
pricing at this early stage are encouraging, with average load
factors 2.0ppts ahead of Summer 2023 at the same point.
We know that many of our Customers prioritise their hard-earned
holidays over other areas of discretionary spend, although we are
mindful of the macro-economic environment and are also monitoring
the current geo-political challenges and how these may impact
future spending behaviour. Therefore, whilst we will carry on
investing in our industry-leading customer service proposition and
operational resilience, we will continue to responsibly manage our
costs to ensure we can maintain our customer offering of great
value holidays and flights.
We believe that our Customers cherish their time away from our
Rainy Island and want to be properly looked after throughout their
holiday experience. Our well-established truly variable duration
holidays and wide-ranging product portfolio, which includes the All
Inclusive Package - all-in cost certainty and a wonderful product
for challenging economic times - provide customers with plenty of
choice and flexibility to be able to tailor their holiday plans to
meet their individual budgets.
Steve Heapy, Jet2 plc Chief Executive Officer, commented:
"We are pleased to have delivered another strong financial
performance during the first half of the financial year, despite
the well-publicised external challenges faced. This clearly
demonstrates that our end-to-end package holiday is a popular and
resilient product and is the Right Product for Price Conscious
Customers.
Our Customer First ethos runs deep throughout our company
culture with 'People, Service, Profits' our guiding principles and
our commitment to an innovative, value for money product and
exceptional customer service is unwavering. We are truly grateful
to have such exceptional Colleagues who are not only some of the
best in their profession but are also highly motivated and
incredibly proud to provide this level of service.
As a result, we remain confident that as a customer focused and
much trusted holiday provider, our Customers will continue to
travel with us to the sun spots of the Mediterranean, the Canary
Islands and to European Leisure Cities and that we can continue to
deliver on our long-term strategy to be the UK's Leading and Best
Leisure Travel business."
Business and Financial Performance
Customer Demand & Revenue
Our Leisure Travel business benefitted from consistent demand
for Real package holidays from Jet2holidays(R) and scheduled
holiday flights from Jet2.com, with the later summer months
displaying a strong shift towards a later booking profile.
Passenger sectors flown increased by 7% to 11.97m (2022:
11.20m), with customers choosing our end-to-end higher margin per
passenger Package Holiday product rising 15% to 4.31m (2022:
3.76m). Consequently, Package Holiday customers represented 70.8%
of overall flown passengers (2022: 65.9%) and as a result, single
sector passengers choosing our Flight-Only product reduced by 9% to
3.49m (2022: 3.82m).
Average load factor remained stable at 90.7% (2022: 90.7%) on a
7% increase in seat capacity to 13.20m (2022: 12.35m), underlining
the popularity and resilience of our Leisure Travel products.
Pricing was robust with Flight-only ticket yield per passenger
sector 18% higher than the prior period at GBP124.09 (2022:
GBP105.00) and the average price of a Jet2holidays package holiday
up 11% to GBP855 (2022: GBP771).
Non-ticket revenue per passenger sector of GBP25.81 (2022:
GBP25.79) was consistent year-on-year. This performance included
improved in-flight product mix and stock availability as compared
to the supply issues experienced during the previous summer, offset
by lower flight-only hold baggage revenue due to the growing
package holiday mix (where the hold bags are included in the
holiday price).
As a result, overall Group Revenue increased 24% to GBP4,407.4m
(2022: GBP3,567.6m).
Net Operating Expenses
Increased passenger volumes and the resultant higher levels of
flying activity, plus the shift to a higher proportion of package
holiday customers, resulted in a 24% increase in direct operating
expenses (including direct staff costs) to GBP3,285.2m (2022:
GBP2,654.9m), with fuel, carbon and accommodation costs showing
disproportionate growth above the volume increase, due to cost
inflation.
Underlying wage costs increased 9% reflecting the challenging
inflationary environment and recognising that happy and well-paid
Colleagues are fundamental to the future success of our
business.
Finally, the Group continued to make considerable investment in
brand and direct marketing to sustain average load factors for
Summer 2023 and to support customer bookings for Winter 2023/24 and
Summer 2024.
As a result, total net operating expenses increased 24% to
GBP3,790.4m (2022: GBP3,051.0m).
Operating Profit
Overall Group operating profit increased 19% to GBP617.0m (2022:
GBP516.6m), which included approximately GBP14.0m of lost
profitability from the broader disruption caused by the NATS
failure, Rhodes wildfires and flooding in Skiathos as was widely
reported in the media.
Net Financing Income
Net financing income (excluding Net FX revaluation losses)
increased by GBP59.0m to GBP46.9m (2022: GBP12.1m expense),
primarily due to GBP80.1m (2022: GBP20.5m) of finance income
following multiple bank interest rate increases, combined with
higher average cash balances.
Group profit before foreign exchange revaluation &
taxation
As a result, Group profit before foreign exchange revaluation
and taxation increased 32% to GBP664.6m (2022: GBP505.0m). Total
profit for the period after taxation increased 39% to GBP496.0m
(2022: GBP356.0m).
Cash Flow & Liquidity
In the first half of the financial year, the Group generated
cash from operating activities of GBP802.4m (2022: GBP787.0m) , the
increase primarily a result of improved EBITDA, together with
higher finance income, offset by a larger run off of customer
advances driven by volume growth.
Capital expenditure of GBP182.0m (2022: GBP65.3m) represented
balance payments for Airbus A321neo deliveries in the period,
together with pre-delivery payments for future aircraft deliveries.
In addition, we continued to invest in the ongoing maintenance of
our existing aircraft fleet, ensuring its long-term reliability and
performance. In early May 2023, Jet2.com took the opportunity to
secure additional premises at Manchester Airport to build a second
aircraft maintenance facility (next to its existing facility) which
will support our anticipated fleet growth over the forthcoming
decade.
Furthermore, we invested in our new ROC to take control of
Jet2.com's inflight logistics operation, which was officially
opened on 18 October 2023.
Purchase of equity investments of GBP2.0m represented the
initial investment in the Fulcrum NorthPoint facility, being
developed by Fulcrum BioEnergy Ltd, securing Jet2.com's access to
sustainable aviation fuel which is planned to be produced by this
facility from 2027.
Net cash used in financing activities of GBP31.7m (2022:
GBP138.7m), comprised GBP126.4m of debt repayments, which included
GBP47.0m to repay short term mid-life aircraft funding advanced
during the pandemic, offset by loans advanced of GBP94.7m for new
aircraft deliveries in the period.
Overall liquidity improved significantly with a total cash
balance (including money market deposits) at the half year end of
GBP3,214.6m, an increase of 14% (2022: GBP2,830.7m). Our 'Own Cash'
position (excluding customer deposits) of GBP2,121.2m increased by
8% (2022: GBP1,968.6m).
Total debt decreased by 12% to GBP1,393.7m (2022: GBP1,584.9m)
and net cash increased by 46% to GBP1,820.9m (2022:
GBP1,245.8m).
Extension of Revolving Credit Facility ("RCF")
Since the half year end, the Group has successfully extended its
sustainability-linked RCF by a further year through to 19 October
2027, on the same commercial terms with our four supportive
relationship banks: Barclays Bank plc; HSBC UK Bank plc; Lloyds
Bank plc; and National Westminster Bank plc.
The Group maintains a robust financial position, characterised
by a strong balance sheet and ample liquidity. These invaluable
resources form the bedrock of our growth ambitions for the coming
years, but also provide us with the necessary financial resilience
to adapt to and navigate potential challenges should they
arise.
Key Performance Indicators Half year Half year Half
ended ended year end
30 September 30 September change
2023 2022
---------------------------------------- -------------- -------------- ----------
Leisure Travel sector seats available
(capacity) 13.20m 12.35m 7%
======================================== ============== ============== ==========
Leisure Travel passenger sectors
flown 11.97m 11.20m 7%
======================================== ============== ============== ==========
Leisure Travel average load factor 90.7% 90.7% -
======================================== ============== ============== ==========
Flight-only passenger sectors flown 3.49m 3.82m (9%)
======================================== ============== ============== ==========
Package holiday customers 4.31m 3.76m 15%
======================================== ============== ============== ==========
Package holiday customers % of total
passenger sectors flown 70.8% 65.9% 4.9ppts
======================================== ============== ============== ==========
Flight-only ticket yield per passenger
sector (excl. taxes) GBP124.09 GBP105.00 18%
======================================== ============== ============== ==========
Average package holiday price (excl.
taxes) GBP855 GBP771 11%
======================================== ============== ============== ==========
Non-ticket revenue per passenger GBP25.81 -
sector GBP25.79
======================================== ============== ============== ==========
Advance sales made as at 30 September GBP2,169.1m GBP1,665.5m 30%
---------------------------------------- -------------- -------------- ----------
Certain information contained in this announcement would have
been deemed inside information as stipulated under the UK version
of the EU Market Abuse Regulation (2014/596) which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018, as
amended and supplemented from time to time, until the release of
this announcement.
Based on Company compiled consensus of 12 analysts, the Board
believes current average market expectations for Group profit
before FX revaluation and taxation for the year ending 31 March
2024 to be GBP507m.
For further information, please contact:
Jet2 plc Tel: 0113 239 7692
Steve Heapy, Chief Executive Officer
Gary Brown, Group Chief Financial
Officer
Cavendish Capital Markets Limited Tel: 020 7220 0500
Nominated Adviser
Katy Birkin
Camilla Hume
George Lawson
Canaccord Genuity Limited Tel: 020 7523 8000
Joint Broker
Adam James
Jefferies International Limited Tel: 020 7029 8000
Joint Broker
Ed Matthews
Becky Lane
Buchanan Tel: 020 7466 5000
Financial PR
Richard Oldworth
Toto Berger
Notes to Editors
-- Jet2holidays is the UK's largest package holidays provider
and Jet2.com is the UK's third largest airline by number
of passengers flown.
-- Jet2 currently operates from 10 bases across the UK - Belfast,
Birmingham, Bristol, East Midlands, Edinburgh, Glasgow, Leeds
Bradford, London Stansted, Manchester and Newcastle. Operations
at Liverpool John Lennon Airport will commence in March 2024.
Jet2 plc
Condensed Consolidated Income Statement (Unaudited)
for the half year ended 30 September 2023
Note Half year Half year Year
ended ended ended
30 September 30 September 31 March
2023 2022 2023
GBPm GBPm GBPm
------------------------------------------- ----- -------------- -------------- ----------
Revenue 4,407.4 3,567.6 5,033.5
Net operating expenses 5 (3,790.4) (3,051.0) (4,639.5)
------------------------------------------- ----- -------------- -------------- ----------
Operating profit 617.0 516.6 394.0
Finance income 80.1 20.5 58.7
Finance expense (33.2) (32.6) (64.5)
Net FX revaluation losses (4.1) (54.3) (19.8)
------------------------------------------- ----- -------------- -------------- ----------
Net financing income / (expense) 42.8 (66.4) (25.6)
Profit on disposal of property,
plant and equipment 0.7 0.5 2.6
Profit before taxation 660.5 450.7 371.0
Taxation 7 (164.5) (94.7) (80.2)
Profit for the period
(all attributable to equity shareholders
of the Parent) 496.0 356.0 290.8
------------------------------------------- ----- -------------- -------------- ----------
Earnings per share
- basic 6 231.0p 165.9p 135.4p
- diluted 6 207.5p 150.8p 126.6p
------------------------------------------- ----- -------------- -------------- ----------
Jet2 plc
Condensed Consolidated Statement of Comprehensive Income
(Unaudited)
for the half year ended 30 September 2023
Half year Half year Year
ended ended ended
30 September 30 September 31 March
2023 2022 2023
GBPm GBPm GBPm
---------------------------------------------- -------------- -------------- ----------
Profit for the period 496.0 356.0 290.8
Other comprehensive income / (expense)
---------------------------------------------- -------------- -------------- ----------
Cash flow hedges:
Fair value gains / (losses) 87.1 178.1 (49.4)
Net amount transferred to Consolidated
Income Statement 22.0 (139.2) (164.1)
Cost of hedging reserve - changes in fair
value 3.3 2.9 (17.0)
Related taxation (charge) / credit (28.1) (13.8) 47.6
Revaluation of foreign operations 0.6 7.8 3.9
84.9 35.8 (179.0)
Total comprehensive income for the period
(all attributable to equity shareholders
of the Parent) 580.9 391.8 111.8
============================================== ============== ============== ==========
Jet2 plc
Condensed Consolidated Statement of Financial Position
(Unaudited)
at 30 September 2023
30 September 30 September 31 March
2023 2022 2023
GBPm GBPm GBPm
Non-current assets
Intangible assets 26.8 26.8 26.8
Property, plant and equipment 1,039.4 867.2 927.7
Right-of-use assets 552.8 535.0 565.3
Investments 2.0 - -
Derivative financial instruments 28.1 32.9 14.3
----------------------------------- ------------- ------------- ---------
1,649.1 1,461.9 1,534.1
---------------------------------- ------------- ------------- ---------
Current assets
Inventories 60.7 20.9 40.2
Trade and other receivables 266.1 180.8 281.3
Derivative financial instruments 62.8 201.6 45.8
Money market deposits 1,871.6 1,624.8 1,669.5
Cash and cash equivalents 1,343.0 1,205.9 955.2
3,604.2 3,234.0 2,992.0
---------------------------------- ------------- ------------- ---------
Total assets 5,253.3 4,695.9 4,526.1
----------------------------------- ------------- ------------- ---------
Current liabilities
Trade and other payables 823.3 660.7 339.1
Deferred revenue 1,110.8 877.7 1,547.2
Borrowings 79.2 263.2 125.9
Lease liabilities 104.3 95.9 101.8
Provisions 68.6 94.3 57.4
Derivative financial instruments 38.6 24.8 85.1
2,224.8 2,016.6 2,256.5
---------------------------------- ------------- ------------- ---------
Non-current liabilities
Deferred revenue 10.1 7.7 16.4
Borrowings 681.7 669.0 603.3
Lease liabilities 528.5 556.8 544.0
Provisions 49.1 35.3 40.0
Derivative financial instruments 0.9 3.8 16.8
Deferred taxation 157.9 114.4 36.7
----------------------------------- ------------- ------------- ---------
1,428.2 1,387.0 1,257.2
---------------------------------- ------------- ------------- ---------
Total liabilities 3,653.0 3,403.6 3,513.7
----------------------------------- ------------- ------------- ---------
Net assets 1,600.3 1,292.3 1,012.4
=================================== ============= ============= =========
Shareholders' equity
Share capital 2.7 2.7 2.7
Share premium 19.8 19.8 19.8
Cash flow hedging reserve 66.6 181.1 (15.3)
Cost of hedging reserve (15.5) (3.4) (17.9)
Other reserves 55.8 59.1 55.2
Retained earnings 1,470.9 1,033.0 967.9
Total shareholders' equity 1,600.3 1,292.3 1,012.4
=================================== ============= ============= =========
Jet2 plc
Condensed Consolidated Statement of Cash Flows (Unaudited)
for the half year ended 30 September 2023
Half year Half year Year ended
ended ended 31 March
30 September 30 September 2023
2023 2022 GBPm
GBPm GBPm
------------------------------------------------ -------------- ---------------- -----------
Profit before taxation 660.5 450.7 371.0
Net financing (income) / expense (including
Net FX revaluation losses) (42.8) 66.4 25.6
Depreciation 122.1 98.1 185.2
Profit on disposal of property, plant and
equipment (0.7) (0.5) (2.6)
Equity settled share-based payments 7.0 3.9 10.4
Operating cash flows before movements in
working capital 746.1 618.6 589.6
Increase in inventories (20.5) (12.4) (31.7)
Decrease / (increase) in trade and other
receivables 49.0 5.0 (117.5)
Increase in trade and other payables 436.2 438.7 118.7
(Decrease) / increase in deferred revenue (442.7) (303.7) 374.5
Increase in provisions 17.3 52.8 18.6
Cash generated from operations 785.4 799.0 952.2
Interest received 62.3 20.5 58.7
Interest paid (23.8) (24.3) (43.6)
Income taxes paid (21.5) (8.2) (15.2)
Net cash generated from operating activities 802.4 787.0 952.1
------------------------------------------------ -------------- ---------------- -----------
Cash flows used in investing activities
Purchase of property, plant and equipment (180.3) (65.0) (193.9)
Purchase of right-of-use assets (1.7) (0.3) (2.7)
Purchase of equity investments (2.0) - -
Proceeds from sale of property, plant and
equipment 0.7 0.6 2.7
Net increase in money market deposits (201.0) (443.8) (481.9)
Net cash used in investing activities (384.3) (508.5) (675.8)
------------------------------------------------ -------------- ---------------- -----------
Cash flows used in financing activities
Repayment of borrowings (71.1) (100.4) (287.7)
Payment of lease liabilities (55.3) (38.3) (76.2)
New loans advanced 94.7 - -
Dividends paid in the year - - (6.4)
Net cash used in financing activities (31.7) (138.7) (370.3)
------------------------------------------------ -------------- ---------------- -----------
Net increase / (decrease) in cash in the
period 386.4 139.8 (94.0)
Cash and cash equivalents at beginning of
period 955.2 1,047.5 1,047.5
Effect of foreign exchange rate changes 1.4 18.6 1.7
------------------------------------------------ -------------- ---------------- -----------
Cash and cash equivalents at end of period 1,343.0 1,205.9 955.2
================================================ ============== ================ ===========
Jet2 plc
Condensed Consolidated Statement of Changes in Equity
(Unaudited)
for the half year ended 30 September 2023
Share Share Cash Cost Other Retained Total
capital premium flow of hedging reserves earnings shareholders'
hedging reserve (1) equity
reserve
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------- --------- --------- --------- ------------ ---------- ---------- ---------------
Balance at 31 March
2022 2.7 19.8 155.2 (5.5) 51.3 673.1 896.6
Total comprehensive
income - - 25.9 2.1 7.8 356.0 391.8
Share-based payments - - - - - 3.9 3.9
Balance at 30 September
2022 2.7 19.8 181.1 (3.4) 59.1 1,033.0 1,292.3
Total comprehensive
expense - - (196.4) (14.5) (3.9) (65.2) (280.0)
Share-based payments - - - - - 6.5 6.5
Dividends paid in
the year - - - - - (6.4) (6.4)
Balance at 31 March
2023 2.7 19.8 (15.3) (17.9) 55.2 967.9 1,012.4
Total comprehensive
income - - 81.9 2.4 0.6 496.0 580.9
Share-based payments - - - - - 7.0 7.0
Balance at 30 September
2023 2.7 19.8 66.6 (15.5) 55.8 1,470.9 1,600.3
========================= ========= ========= ========= ============ ========== ========== ===============
(1) In June 2021, senior unsecured convertible bonds were issued
generating gross proceeds of GBP387.4m. The equity component of
these bonds was valued at GBP51.4m and recognised in other
reserves. The remaining balance held in other reserves relates to
foreign exchange translation differences arising on revaluation of
non-sterling functional currency subsidiaries of the Group, which
totalled GBP4.4m at 30 September 2023.
Jet2 plc
Notes to the consolidated interim report
for the half year ended 30 September 2023 (Unaudited)
1. General information
Jet2 plc is a public limited company incorporated and domiciled
in England and Wales. The Company's ordinary shares are traded on
the AIM market of the London Stock Exchange. The address of its
registered office is Low Fare Finder House, Leeds Bradford Airport,
Leeds, LS19 7TU.
The Group's interim financial report consolidates the financial
statements of Jet2 plc and its subsidiaries.
This interim report has been prepared and approved by the
Directors in accordance with UK-adopted international accounting
standards and applicable law. It does not fully comply with IAS 34
- Interim Financial Reporting, which is not currently required to
be applied by AIM companies.
2. Accounting policies
Basis of preparation of the interim report
This unaudited consolidated interim financial report for the
half year ended 30 September 2023 does not constitute statutory
accounts as defined in s435 of the Companies Act 2006. The
financial statements for the year ended 31 March 2023 were prepared
in accordance with UK-adopted international accounting standards
and applicable law and have been delivered to the Registrar of
Companies. The report of the auditor on those financial statements
was unqualified, did not contain an emphasis of matter paragraph
and did not contain any statement under s495(3) nor (4) of the
Companies Act 2006.
The interim financial report has been prepared under the
historical cost convention except for all derivative financial
instruments, which have been measured at fair value. The accounting
policies applied within this interim report are consistent with
those detailed in the Annual Report & Accounts for the year
ended 31 March 2023.
The Group's interim financial report is 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 profit before and after taxation, balance sheets and
projected cash flows through to 31 March 2026.
For the purpose of assessing the appropriateness of the
preparation of the Group's interim financial report on a going
concern basis, two financial forecast scenarios have been pr epared
for the 12-month period following approval of these financial
statements :
-- A base case which assumes a full unhindered Summer 2024 flying
programme utilising a fleet of 127 aircraft at average load
factors above 90%, against a 12% increase in seat capacity;
and
-- A downside scenario with load factors reduced to 80% for 12
months from November 2023 to reflect a possible reduction in
demand, but with no restrictions on flying to any of the Group's
destinations.
The forecasts consider the current cash position and an
assessment of the principal areas of risk and uncertainty, paying
particular attention to the impact of the current UK macro-economic
environment and how this may affect consumers' future spending.
In addition to forecasting the cost base of the Group, both
scenarios incorporated the funding of some future aircraft
deliveries with our well-established aircraft financing partners
and no mitigating actions taken to defer uncommitted capital
expenditure during the forecast period .
The Directors concluded that, given the combination of a closing
cash balance (including money market deposits) of GBP3,214.6m at 30
September 2023, together with the forecast monthly cash
utilisation, under both scenarios the Group would have sufficient
liquidity throughout a period of 12 months from the date of
approval of this interim financial report. In addition, the Group
is forecast to meet its RCF covenants at 31 March 2024 and 30
September 2024 under both scenarios with significant headroom .
As a result, the Directors have a reasonable expectation that
the Group as a whole has adequate resources to continue in
operational existence for a period of 12 months from the date of
approval of the interim financial report. For this reason, they
continue to adopt the going concern basis in preparing the
unaudited interim report for the half year ended 30 September
2023.
3. Alternative performance measures
The Group's alternative performance measures are not defined by
IFRS and therefore may not be directly comparable with other
companies' alternative performance measures. These measures are not
intended to be a substitute for, or superior to, IFRS
measurements.
Profit before FX revaluation and taxation
Profit before FX revaluation and taxation is included as an
alternative performance measure in order to aid users in
understanding the underlying operating performance of the Group
excluding the impact of foreign exchange volatility.
Half year Half year Year ended
ended ended 31 March
30 September 30 September 2023
2023 2022
GBPm GBPm GBPm
-------------- -------------- -----------
Profit before taxation 660.5 450.7 371.0
Net FX revaluation losses 4.1 54.3 19.8
Profit before FX revaluation
and taxation 664.6 505.0 390.8
============== ============== ===========
'Own Cash'
'Own Cash' comprises cash and cash equivalents and money market
deposits and excludes advance customer deposits. It is included as
an alternative measure in order to aid users in understanding the
liquidity of the Group.
Half year Half year Year ended
ended ended 31 March
30 September 30 September 2023
2023 2022
GBPm GBPm GBPm
-------------- -------------- -----------
Cash and cash equivalents 1,343.0 1,205.9 955.2
Money market deposits 1,871.6 1,624.8 1,669.5
-------------- -------------- -----------
Cash and money market deposits 3,214.6 2,830.7 2,624.7
Deferred revenue (1,120.9) (885.4) (1,563.6)
Trade and other receivables 27.5 23.3 66.0
'Own Cash' 2,121.2 1,968.6 1,127.1
============== ============== ===========
Trade and other receivables relates to invoicing of amounts due
from travel agents in respect of package holiday deposits and
balance payments.
4. Segmental reporting
IFRS 8 - Operating segments requires operating segments to be
determined based on the Group's internal reporting to the Chief
Operating Decision Maker ("CODM").
The 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. Consequently,
the Board of Directors is considered to be the CODM.
The information presented to the CODM for the purpose of
resource allocation and assessment of the Group's performance
relates to its Leisure Travel segment as shown in the Consolidated
Income Statement.
The Leisure Travel business specialises in offering package
holidays by its ATOL licensed provider, Jet2holidays, to leisure
destinations in the Mediterranean, the Canary Islands and to
European Leisure Cities, and scheduled holiday flights by its
airline, Jet2.com. Resource allocation decisions are based on the
entire route network and the deployment of its entire aircraft
fleet. All Jet2holidays customers fly on Jet2.com flights, and
therefore these segments are inextricably linked and represent the
only segment within the Group.
Revenue is principally generated from within the UK, the Group's
country of domicile. No customer represents more than 10% of the
Group's revenue.
Revenues for the Group can be further disaggregated by their
nature for the purposes of IFRS 15 as follows:
Half year Half year Year ended
ended 30 ended 30 31 March
September September 2023
2023 2022
GBPm GBPm GBPm
Restated
----------- ----------- -----------
Package holidays* 3,628.9 2,857.8 3,969.7
Flight-only ticket revenue 429.4 390.6 556.7
Non-ticket revenue 308.9 288.8 421.5
Other Leisure Travel ++ 40.2 30.4 85.6
----------- ----------- -----------
Total revenue 4,407.4 3,567.6 5,033.5
=========== =========== ===========
* Package holidays revenue is stated net of government taxes and
incorporates a timing adjustment in respect of holidays still in
progress at the period end as per IFRS 15 - Revenue from Contracts
with Customers .
Flight-only ticket revenue is stated net of a proportion of
flight delay compensation payments up to the full value of the
ticket price. Any remaining compensation which exceeds the full
value of the ticket price is charged to net operating expenses.
++ Other Leisure Travel revenue of GBP40.2m (2022: GBP30.4m)
consists of cancellation income and charter revenues.
5. Net operating expenses
Half year Half year Year ended
ended 30 ended 30 31 March
September September 2023
2023 2022
GBPm GBPm GBPm
Direct operating costs:
Accommodation 1,771.5 1,415.6 1,973.6
Fuel 468.3 324.5 521.4
Landing, navigation and third-party
handling 314.2 271.4 403.4
Agent commission 123.3 103.9 142.0
Carbon 76.9 57.3 76.7
Maintenance 74.2 52.1 105.2
In-flight cost of sales 57.2 45.0 76.7
Aircraft rentals (less than twelve
months) 54.2 53.9 61.1
Other direct operating costs 155.3 181.0 190.1
Staff costs including agency staff 379.3 288.1 590.4
Depreciation of property, plant
and equipment 70.7 65.9 118.9
Depreciation of right-of-use assets 51.5 32.2 66.3
Other operating charges 193.8 160.1 313.7
Total net operating expenses 3,790.4 3,051.0 4,639.5
=========== =========== ===========
6. Earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to the equity owners of the Parent Company by the
weighted average number of ordinary shares in issue during the
period.
Diluted earnings per share is calculated by dividing the profit
attributable to the equity owners of the Parent Company by the
weighted average number of ordinary shares in issue during the
period, adjusted for the effects of potentially dilutive share
options and deferred awards, along with the potential conversion of
the convertible bonds to ordinary shares at maturity in June
2026.
Half year ended 30 September Half year ended 30 September
2023 2022
Earnings Weighted EPS Earnings Weighted EPS
average number average number
of shares of shares
GBPm millions Pence GBPm millions Pence
Basic EPS
Profit attributable
to ordinary shareholders 496.0 214.7 231.0 356.0 214.6 165.9
--------------------------- --------- --------------------------- ------- --------- ---------------- -------
Effect of dilutive
instruments
Share options
and deferred
awards - 5.9 (6.2) - 4.6 (3.5)
Convertible bonds 6.7 21.7 (17.3) 7.0 21.5 (11.6)
Diluted EPS 502.7 242.3 207.5 363.0 240.7 150.8
--------------------------- --------- --------------------------- ------- --------- ---------------- -------
7. Taxation
The taxation charge for the period of GBP164.5m (2022: GBP94.7m)
reflects an estimated effective tax rate of approximately 25%
(2022: 21%).
8. Dividends
The declared interim dividend of 4.0p per share (2022: 3.0p)
will be paid out of the Company's available distributable reserves
on 2 February 2024, to shareholders on the register at 29 December
2023, with the ex-dividend date being 28 December 2023. In
accordance with IAS 1, dividends are recorded only when paid and
are shown as a movement in equity rather than as a charge to the
Consolidated Income Statement.
9. Notes to Consolidated Statement of Cash Flows
Changes in cash and Cash and Money Borrowings Lease Total
financing liabilities cash equivalents market liabilities Net cash
deposits / (debt)
GBPm GBPm GBPm GBPm GBPm
At 1 April 2023 955.2 1,669.5 (729.2) (645.8) 1,249.7
Repayment of borrowings - - 71.1 - 71.1
Payment of lease liabilities - - - 55.3 55.3
New loans advanced - - (94.7) - (94.7)
Total changes from
financing cash flows - - (23.6) 55.3 31.7
Other cash flows 587.4 - - - 587.4
Deposit placements (998.7) 998.7 - - -
Deposit receipts 797.7 (797.7) - - -
Exchange differences 1.4 1.1 (2.2) (6.6) (6.3)
Unwind of interest(1) - - (5.9) (2.7) (8.6)
Lease movements(2) - - - (33.0) (33.0)
At 30 September 2023 1,343.0 1,871.6 (760.9) (632.8) 1,820.9
================== ========== =========== ============= ==========
(1) Unwind of interest relates to the discount rates applied on
receipt of the convertible bond and amortisation of transaction
costs associated with Borrowings and Lease liabilities.
(2) Lease movements include new leases and lease term
amendments.
10. Contingent liabilities
The Group has issued various guarantees in the ordinary course
of business, none of which are expected to lead to a financial gain
or loss.
11. Other matters
This report will be posted on the Group's website,
www.jet2plc.co m and copies are available from the Group Company
Secretary at the registered office address: Low Fare Finder House,
Leeds Bradford Airport, Leeds, LS19 7TU.
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END
IR FEFFMEEDSEEF
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