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. Turnover in Jet2.com, the group’s leisure airline, increased by 16 per cent to £643.1m as demand for seats 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.
The firm added 32 new routes connecting its northern UK bases with holiday destinations in the Mediterranean and the Canary Islands.