Jet2 owners hit with £109m charge
Dart Group, has reported that its board expects pre-exceptional group profit before foreign exchange revaluation and taxation for the financial year to 31 March 2020 to be between £265m – £270m, an increase of approximately 49% on the previous year.
In a trading update for the year ending 31 March 2020 and the year ending 31 March 2021, the owners of Jet2.com and Jet2holidays highlighted that despite holidays still being on sale for dates after 17 June 2020 all of its operations are currently suspended. The board currently estimates “a net exceptional charge of approximately £109m relating to ineffectiveness on a proportion of FY21 fuel and foreign currency hedges in the FY20 results.”
Jet2.com suspended its flying programme in mid-March due to the unprecedented travel restrictions imposed as a result of pandemic. However the group’s leisure travel business still achieved overall flown passenger growth of 14% to 14.6m and growth in Package Holiday customers of 19% to 3.8m for the 2020 financial year.
Looking ahead the board has no clarity as to how the current situation will affect group profit for the financial year ending 31 March 2021. But does report that amidst the uncertainty, the group is still seeing customers making bookings for late summer 20 and winter 20/21, with encouraging numbers choosing to rebook rather than cancel. The holiday company also reports that summer 21 bookings to date are very promising.
Dart Group has however already taken actions to underpin the stability of its business and preserve cash, furloughing 80% of its UK staff and taking advantage of the UK Government’s Coronavirus Job Retention Scheme, and similar overseas initiatives. Despite this salaries remain a substantial proportion of its costs and as a result all colleagues, including directors, have been asked to take a pay cut of up to 30% for the 6-month period from 1 April 2020 until 30 September 2020.
In addition to these measures, the group has also cancelled all 12 summer-only third-party leased aircraft, deferred non-critical capital expenditure, and put a freeze on recruitment and discretionary spending.
Despite the uncertainty in the travel industry, Dart Group’s distribution & logistics business, Fowler Welch, continues to perform strongly, providing much needed and valuable distribution services to the UK food industry supply chain.
The board concludes: “We remain confident that once normality returns, our customers will be determined to enjoy the wonderful experience of a well-deserved Jet2 holiday and that Jet2.com and Jet2holidays will continue to have a thriving future.”
