Jet2 owner warns after weak summer demand
DESPITE posting strong full year results Dart Group has warned that operating profit for the current year will be below current market forecasts.
The group, which owns Jet2, warned that it has seen a dip in demand for leisure travel this summer.
The firm boosted pre-tax profit by 4% to £42.1m, operating profit increased by 30% to £49.2m and revenues rose by 29% to £1.1bn.
Dart, which also operates the Fowler Welch logistics business, said the performance in the year ended March 31 2014 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 holidays to 830,019, compared to 417,390 last year. As a result, Jet2holidays’ operating profit increased by 122% to £14.4m as turnover increased 103% to £496.2m.
Turnover in Jet2.com, the group’s leisure airline, increased by 16% to £643.1m as demand for seats, supported by Jet2holidays, resulted in another year of improved load factors and increased net ticket yields.
Dart said it spent £83.5m during the year, principally related to long-term maintenance spend on aircraft and engines, the acquisition of two Boeing 737 aircraft, and investment in its new flight crew training centre.
Chairman Philip Meeson said: “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.”
However, Mr Meeson said the business is finding demand for leisure travel this summer less buoyant than it 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,” he said.
“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.”
The board is recommending a final dividend of 2.14p per share bringing the total proposed dividend to 2.74p per share for the year to 31 March 2014, an increase of 47%.
