Sales soar at Jet2 owners but pre-tax profits take a dive

Revenues have taken off at Jet2 owners Dart Group, but major investments over the year into airport bases have taken their toll on pre-tax profits.

Group revenues from the Jet2 businesses and logistics company Fowler Welch, grew 23% to £1.7bn for the year to 31 March 2017, from £1.4bn the year before.

Strong leisure travel demand and “resilient” ticket pricing for the summer 2016 allowed them to discount more heavily in the second half, said the Leeds-based company, allowing growth in customer volumes.

Pre-tax profits however took a major dive, dropping by 14% to £90.1m from £104.2m. This was a result of major investment into two bases at London Stansted and Birmingham Airports.

The 8th and 9th bases for Jet2 now provide 58 destinations for customers across the Mediterranean.

Dart said that Jet2.com flew a total of 7.10m passengers during the year, up from 6.07m in 2015, to and from popular sun, city and ski destinations during the year, an increase of 17%.

Executive chairman Philip Meeson said: “Both our Leisure Travel and Distribution & Logistics businesses have made satisfactory starts to the new financial year.

“Given visibility on current forward bookings and the recent successful launch of our new operating bases at Birmingham and London Stansted Airports, the Board expects to meet current market expectations of underlying profit before taxation for the year ending 31 March 2018.

“Looking further ahead, there remains considerable uncertainty around “Brexit” negotiations and the effect these could have, both on our freedom to fly and on our customers’ ability to travel to our leisure destinations.

“This is unsettling; however, we believe that the UK Government recognises the importance of aviation services, and similarly, European countries appreciate the value that British tourists bring to their respective economies.

“Therefore, for the long-term, we remain confident in the resilience of our Leisure Travel business and we are encouraged by the increasing proportion of customers choosing our great value, real package holidays, which are not easily replicated by non-specialists, and have proven particularly popular in challenging economic times.”

The board is recommending a final dividend of 3.897p up from 3.10p, bringing the proposed total dividend to 5.272p per share for the year ended 31 March 2017 (2016: 4.0p).

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