Dart Group’s profits warning as summer holiday sales disappoint

Philip Meeson, CEO of Dart Group
Philip Meeson, CEO of Dart Group
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DART Group, the owner of Jet2.com and Jet2holidays, warned that profits will fall short of expectations this year after demand for summer holidays was slower than expected.

The Leeds-based group said the weak demand could be due to the fine weather, the World Cup or because the economic recovery is yet to take hold in the firm’s northern heartlands. The company also warned that prices are also weak.

Chairman Philip Meeson said: “Unfortunately in view of the current visibility we have of our remaining summer 2014 forward bookings, we now expect the current year operating profit out-turn to be lower than previous market expectations.”

The warning followed the announcement of strong annual results. The group announced a four per cent increase in pre-tax profits to £42m in the year to March 31 on the back of a 29 per cent increase in turnover to £1.12bn.

The group is recommending a final dividend of 2.14p per share, up from 1.33p last year, bringing the total proposed dividend to 2.74p per share for the year to March 31, up 47 per cent on last year.

Mr Meeson said the improved performance reflects the success of the group’s leisure travel businesses.

Jet2holidays, the group’s package holiday business, almost doubled the number of customers to 830,019.

Mr Meeson said the growth reflects the successful development of the Jet2holidays product, which offers packages including flights, transfers and accommodation and ranging from budget self-catering, to five-star luxury hotels.

Jet2holidays’ operating profit increased by 122 per cent to £14.4m as turnover increased 103 per cent to £496.2m.

Turnover in Jet2.com, the group’s leisure airline, increased by 16 per cent to £643.1m as demand for seats, supported by Jet2holidays, produced another year of improved load factors and increased net ticket yields.

Jet2.com’s operating profit increased by 17 per cent to £31.2m, but pre-tax profits fell 18 per cent to £23.9m due to currency reductions.

“Good progress has been made in our leisure travel businesses over the year,” said Mr Meeson.

“We added 32 new routes connecting our Northern UK bases with our holiday destinations, primarily popular Mediterranean and Canary Island resorts and great leisure cities.”

Of its 2.8 million customers, over 830,000 purchased a Jet2holidays package, making Jet2 the third largest CAA licensed, ATOL bonded holiday company in the UK.

“The all-inclusive package holiday represents great and dependable value, and is a long-established and popular product, with special attraction for customers on a tight budget in these difficult economic times,” said Mr Meeson.

“Our low deposit, 22kg baggage allowance and family friendly flight times all contribute to the attraction of our package holidays product and we ensure that we deliver a holiday that our customers can both look forward to and remember with pleasure.

“This includes the flights with Jet2.com, carefully organised coach transfers, attractive hotels with good facilities, and friendly representatives in resort.”

Jet2.com operated 53 aircraft from its eight northern UK bases last summer and achieved an improved load factor of 91 per cent.

The fleet has grown to 55 for summer 2014 with the addition of five leased Boeing 737-800’s and a reduction in the number of short-term chartered aircraft.