TIDMDTG
RNS Number : 1296E
Dart Group PLC
14 July 2016
DART GROUP PLC
PRELIMINARY UNAUDITED RESULTS FOR YEARED 31 MARCH 2016
Dart Group PLC, the Leisure Travel and Distribution &
Logistics group ("the Group"), announces its preliminary results
for the year ended 31 March 2016. These results are presented under
International Financial Reporting Standards ("IFRS").
Financial Highlights Year ended Year ended Change
31 March 31 March
2016 2015
(Unaudited) (Audited)
------------------------------------------- ------------- ------------ ----------
Group revenue GBP1,405.4m GBP1,253.2m +12%
------------------------------------------- ------------- ------------ ----------
Group operating profit (Underlying(1) ) GBP105.0m GBP50.2m +109%
Operating profit margin (Underlying(1) ) 7.5% 4.0% +3.5 ppts
------------------------------------------- ------------- ------------ ----------
Group operating profit GBP105.0m GBP33.2m +216%
Operating profit margin 7.5% 2.6% +4.9 ppts
------------------------------------------- ------------- ------------ ----------
Profit before tax (Underlying(1) ) GBP104.2m GBP57.2m +82%
Profit before tax GBP104.2m GBP40.2m +159%
------------------------------------------- ------------- ------------ ----------
Basic earnings per share (Underlying(1) ) 60.22p 31.72p +90%
Basic earnings per share 60.22p 22.42p +169%
------------------------------------------- ------------- ------------ ----------
Proposed final dividend per share 3.10p 2.25p +38%
Resulting total dividend per share 4.00p 3.00p +33%
------------------------------------------- ------------- ------------ ----------
1: The "Underlying" prior year results are stated excluding a
separately disclosed exceptional provision of GBP17.0m, in relation
to possible passenger compensation claims for historical flight
delays.
* Group revenue increased 12% to GBP1,405.4m (2015: GBP1,253.2m)
while Group operating profit increased 109% to GBP105.0m (2015
Underlying: GBP50.2m), reflecting strong trading in our Leisure
Travel business together with an improved performance from the
Group's Distribution & Logistics business.
* Profit before tax grew 82% to GBP104.2m (2015 Underlying:
GBP57.2m) and Basic earnings per share increased 90% to 60.22p
(2015 Underlying: 31.72p).
* In consideration of the Group's encouraging results, the Board
is recommending a final dividend of 3.10p (2015: 2.25p), bringing
the proposed total dividend to 4.00p per share for the year ended
31 March 2016 (2015: 3.00p).
* Leisure Travel revenue grew 15% to GBP1,261.4m (2015:
GBP1,101.5m) reflecting increased yields from both our flight-only
and package holidays products and a 22% increase in package holiday
customers, who represented 40% of total departing passengers (2015:
33%).
* Distribution & Logistics improved its profit before tax by
GBP2.1m to GBP5.4m (2015: GBP3.3m) on reduced revenues of GBP144.0m
(2015: GBP151.7m) as lower fuel costs were passed on to
customers.
* The current financial year has started well in both our
Leisure Travel and Distribution businesses. Although we were
disappointed at the result of the recently held referendum on
whether the UK should remain in the EU, we are confident that our
customers will need our specialist food distribution services and
will be keen to travel from our rainy islands to the sun spots of
the Mediterranean, The Canaries and to European Leisure Cities.
CHAIRMAN'S STATEMENT
I am pleased to report the Group's strong trading for the year
ended 31 March 2016. Operating profit increased by 109% to
GBP105.0m (2015 Underlying: GBP50.2m) and profit before tax by 82%
to GBP104.2m (2015 Underlying: GBP57.2m). Growth in basic earnings
per share was 90% to 60.22p (2015 Underlying: 31.72p).
In consideration of the Group's encouraging results, the Board
is recommending a final dividend of 3.10p per share (2015: 2.25p)
which will bring the total proposed dividend to 4.00p per share for
the year (2015: 3.00p), an increase of 33%. This final dividend is
subject to shareholders' approval at the Company's Annual General
Meeting on 8 September 2016 and will be payable on 21 October 2016
to shareholders on the register at the close of business on 16
September 2016.
The increase in profitability reflects the strength of the
Group's Leisure Travel business, which combines both Jet2.com, our
leisure airline and Jet2holidays, our package holidays provider,
together with an improved performance from Fowler Welch, our
Distribution and Logistics business.
Revenue in our Leisure Travel business increased by 15% to
GBP1,261.4m (2015: GBP1,101.5m) and operating profit improved by
112% to GBP99.6m (2015 Underlying: GBP46.9m) as over 3.0m departing
customers took a flight or package holiday to our sun, city and ski
destinations during the year.
Jet2.com flew a total of 6.07m passenger sectors (2015: 6.05m)
and achieved an average load factor of 92.5% (2015: 91.2%)
alongside an increase in average net ticket yield of 14%.
Jet2holidays took 1.22m customers (2015: 1.00m) on holiday, an
increase of 22%, representing 40% of departing customers (2015:
33%).
To meet our programme of aircraft fleet replacement and our
planned Leisure Travel business growth, on 3 September 2015 we were
delighted to announce an agreement with Boeing to purchase 27 new
Boeing 737-800NG aircraft, and subsequently in December 2015, an
agreement to purchase a further 3 new aircraft. These aircraft will
be delivered between September 2016 and April 2018.
Fowler Welch improved its profit before tax by GBP2.1m to
GBP5.4m (2015: GBP3.3m) on reduced revenues of GBP144.0m (2015:
GBP151.7m) as lower fuel costs were passed on to customers.
The Group generated increased net cash flow from operating
activities of GBP243.9m (2015: GBP116.1m). Total capital
expenditure of GBP213.5m (2015: GBP76.4m) included the purchase of
three used Boeing 737-800NG aircraft, one for summer 2015 and two
for summer 2016, deposits and pre-delivery payments for the new
Boeing aircraft order, and continued investment in the long-term
maintenance of our existing fleet of aircraft and engines. The new
aircraft pre-delivery payments have been substantially
financed.
As at 31 March 2016, the Group's cash and money market deposit
balances had increased by GBP109.2m (2015: GBP39.1m) to GBP412.0m
(2015: GBP302.8m) and included advance payments from Leisure Travel
customers of GBP385.8m (2015: GBP318.7m), in respect of their
future holidays and flights.
Leisure Travel
We take people on holiday! Our Leisure Travel business
specialises in scheduled flights by our airline Jet2.com to holiday
destinations in the Mediterranean, the Canary Islands and to
European Leisure Cities and the provision of ATOL licensed package
holidays by our tour operator Jet2holidays.
Our core principles are to be family friendly, offer value for
money and give great customer service. For those customers who have
arranged their own accommodation, our flights offer competitive
fares, convenient flight times, allocated seating and a 22kg
baggage allowance. Our package holidays, however, give us the
opportunity to deliver an 'end-to-end' experience to which we add
value through innovation and customer service. Importantly, our
customer volumes allow us to serve many destinations daily and
others several times a week during the spring, summer and autumn
months, and enable us to offer a great choice of variable duration
holidays at affordable prices.
Real package holidays take considerable organisation and
attention to detail. Jet2holidays employs over 900 colleagues
contracting and administering hotels, managing the finances and
providing operational support. The business has contractual
relationships with over 2,700 hotels, encompassing a wide range of
great value 2 to 5-star hotel products, catering for young &
old and families alike. Many have adjacent waterparks and other
great attractions included in the package, adding enjoyment and
interest to the overall holiday experience.
Nearly 40% of our package holidays were sold on an all-inclusive
basis. The all-inclusive package offers a 'Defined Price' for the
whole holiday experience, including flights, transfers, meals,
alcohol for the adults and ice lollies for the kids. This is a
resilient, great value offering for families on a tight budget and
is particularly attractive for challenging economic times. And to
ensure that each of our customers has a happy holiday experience we
employ nearly 300 representatives in holiday resorts, backed up by
24-hour customer helplines, to give practical assistance in all
eventualities.
The last day of a holiday can often be stressful and with this
in mind the business has introduced its "In-resort Flight Check-in"
service at many hotels. This allows Jet2holidays customers to
check-in their baggage for their return flight home at their hotel,
allowing them to enjoy their final day, bag and hassle free.
On 7 July 2016 we were very pleased to announce that from April
2017 we will be offering our flights and package holidays from
Birmingham Airport - our eighth UK aircraft base. We know that
there is strong demand for our services in the Midlands.
During the financial year, Jet2.com operated 59 aircraft from
our then seven Northern UK airport bases to 61 destinations,
serving 379 holiday resorts and added three new destinations,
Antalya, Kefalonia and Malta. The fleet has grown to 63 aircraft
for summer 2016, with a commensurate increase in pilots, engineers
and cabin crew. To ensure we have well trained colleagues to
support continued growth, our flight simulator and training centre
in Bradford has recently taken delivery of a fourth flight
simulator.
We are fully focused on our package holidays offering and its
inherent higher margin and are encouraged that sales continue to
grow, outstripping the market, as our reputation for providing
'package holidays you can trust' develops. We ensure that the
customer is at the heart of everything we do as we strive to
provide wonderful holidays through sustained investment in product,
brand and customer service. We believe we have a great future in
the Leisure Travel marketplace.
Distribution & Logistics
Fowler Welch is one of the UK's leading providers of
distribution and logistics services to the food industry supply
chain, serving retailers, processers, growers and importers across
its network of nine sites, encompassing circa 900k square foot of
warehouse space.
Our major temperature-controlled operations are in the key
produce growing and importing areas of Spalding in Lincolnshire,
Teynham and Paddock Wood in Kent and Hilsea near Portsmouth, with
two further regional distribution sites located at Washington, Tyne
and Wear and at Newton Abbot, Devon. Ambient
(non-temperature-controlled) consolidation and distribution
services are provided at Heywood near Bury and Desborough,
Northamptonshire.
In May 2014, Fowler Welch, together with our partner Direct
Produce Supplies Limited, a leading supplier of fruits to multiple
retailers, commenced a joint venture business, "Integrated Service
Solutions" (ISS) at our Teynham facility in Kent. This provides a
full range of fruit ripening and packing services to the produce
sector. I am very pleased to report that the business is now
contributing positively towards overall Group profitability and
feeding considerable volumes of packed fruits into our distribution
system.
To meet the growing operational needs of ISS and to provide more
distribution space at Teynham, which serves local Kent growers and
is located close to the port of Dover and the Channel Tunnel - main
arteries for fruit and produce imported into the UK, an extension
of the facility was completed on 9 July 2016, adding over 50k
square foot of much needed capacity.
On 6 June 2016 Fowler Welch agreed a contract with Dairy Crest
Limited, to take over its Nuneaton based UK distribution. On this
date, the Dairy Crest fleet of 51 tractor units, along with
associated distribution colleagues transferred to Fowler Welch.
This provides an important additional revenue stream, which will be
developed by the integration of the Dairy Crest and Fowler Welch
fleets and the achievement of supply chain efficiencies.
The improvement in profitability and operating margins achieved
in the year are expected to continue. By developing its revenue
streams and delivering value adding, innovative supply-chain
services, we believe the outlook for Fowler Welch is
encouraging.
Outlook
We have a resilient Leisure Travel business. Our strategy is to
grow both our flight-only and package holidays products. However,
pleasingly, the sales of our higher margin package holidays
continue to outperform the market and to provide an increasingly
larger proportion of the departing passengers on our flights. At
the end of the financial year, package holidays represented 40% of
our departing passengers (2015: 33%) and this trend is continuing
in this new financial year. The provision of real package holidays
is not easily replicated by non-specialists. As discussed earlier
in this statement, the Group dedicates significant resources to
deliver an innovative and industry leading product. These holidays,
especially all-inclusive packages, which give families certainty of
price, have proven particularly successful in challenging economic
times.
The current financial year has started well in both our Leisure
Travel and Distribution businesses. Although we were disappointed
at the result of the recently held referendum on whether the UK
should remain in the EU, we are confident that our customers will
need our specialist food distribution services and will be keen to
travel from our rainy islands to the sun spots of the
Mediterranean, The Canaries and to European Leisure Cities.
Philip Meeson
Chairman
14 July 2016
BUSINESS AND FINANCIAL REVIEW
The Group's financial performance for the year ended 31 March
2016 is reported in line with International Financial Reporting
Standards ("IFRS"), as adopted by the EU, which were effective at
31 March 2016.
Summary Income Statement
Unaudited Audited Audited Audited Change
2016 2015 2015 2015
Total Before Separately Total (2016
separately disclosed vs. 2015
disclosed items before
items (see note separately
7) disclosed
items)
GBPm GBPm GBPm GBPm
------------------------------------ ----------
Revenue 1,405.4 1,253.2 - 1,253.2 12%
Net operating expenses (1,300.4) (1,203.0) (17.0) (1,220.0) (8%)
------------------------------------ ---------- ------------ ------------ ---------- ------------
Operating profit 105.0 50.2 (17.0) 33.2 109%
Net financing income 0.5 0.6 - 0.6 (17%)
Revaluation of derivative
hedges - 1.6 - 1.6 (100%)
Net FX revaluation (losses)/gains (1.3) 4.8 - 4.8 (127%)
------------------------------------ ---------- ------------ ------------ ---------- ------------
Net financing (costs)/income (0.8) 7.0 - 7.0 (111%)
Group profit before tax 104.2 57.2 (17.0) 40.2 82%
Net financing costs /
(income) 0.8 (7.0) - (7.0) 111%
Depreciation 88.7 71.3 - 71.3 24%
------------------------------------ ----------
EBITDA 193.7 121.5 (17.0) 104.5 59%
==================================== ========== ============ ============ ========== ============
Operating profit margin 7.5% 4.0% - 2.6% 3.5 ppts
Group profit before tax
margin 7.4% 4.6% - 3.2% 2.8 ppts
EBITDA margin 13.8% 9.7% - 8.3% 4.1 ppts
----------------------------------- ---------- ------------ ------------ ---------- ------------
A strong summer season for the Leisure Travel business was
followed by a better than expected winter, as customer demand for
our flight-only and package holidays remained buoyant. Net ticket
yields and average package holiday prices showed healthy increases,
resulting in the business increasing its revenue by 12% to
GBP1,405.4m (2015: 1,253.2m).
An improved forward booking position entering summer 2015,
consistent demand and the continuing growth of our higher margin
package holidays product as a percentage of overall sales all
contributed to the Group's improved operating profit of GBP105.0m,
more than double the previous year's underlying result of GBP50.2m.
On a statutory basis, operating profit increased by 216% from
GBP33.2m, after an exceptional charge of GBP17.0m in the previous
year.
Net financing costs of GBP0.8m (2015: income GBP7.0m) included a
net GBP1.3m charge in relation to the revaluation of foreign
currency and pre-delivery payment loan balances held at the
reporting date (2015: income GBP4.8m).
As a result, the Group achieved a statutory profit before tax of
GBP104.2m (2015 Underlying: GBP57.2m). Group EBITDA increased by
59% to GBP193.7m (2015 Underlying: GBP121.5m).
The Group's effective tax rate of 15% (2015: 18%) was lower than
the headline rate of corporation tax of 20% due to its decreasing
deferred tax liability. Earnings per share increased by 90% to
60.22p (2015 Underlying: 31.72p). Overall basic earnings per share
increased by 169% from 22.42p after adjusting for the exceptional
provision of GBP17.0m charged in the previous year.
Summary of Cash Flows
Unaudited Audited Change
2016 2015
GBPm GBPm
----------------------------------------- ---------- -------- ---------
EBITDA 193.7 104.5 85%
Other P&L adjustments 0.1 0.1 -
Movements in working capital 61.0 19.1 219%
Interest and taxes (10.9) (7.6) (43%)
----------------------------------------- ---------- -------- ---------
Net cash generated from operating
activities 243.9 116.1 110%
Purchase of property, plant & equipment (213.5) (76.4) (179%)
Movement on borrowings 81.9 (0.8) 10,338%
Other items (3.1) 0.2 (1,650%)
----------------------------------------- ----------
Increase in net cash and money market
deposits 109.2 39.1 179%
========================================= ========== ======== =========
Net cash generated from operating activities was GBP243.9m
(2015: GBP116.1m) out of which capital expenditure of GBP213.5m
(2015: GBP76.4m) was incurred. The Group generated a net cash
inflow(a) of GBP109.2m (2015: GBP39.1m), resulting in a year end
cash position, including money market deposits, of GBP412.0m (2015:
GBP302.8m). The Group continues to be funded, in part, by payments
received in advance of travel from its Leisure Travel customers,
which at the reporting date amounted to GBP385.8m (2015:
GBP318.7m).
Of these customer advances, GBP68.5m (2015: GBP97.5m) was
considered restricted by the Group's merchant acquirers as
collateral against a proportion of forward bookings paid for by
credit or debit card. These balances become unrestricted once our
customers have travelled. The business also had GBP5.2m (2015:
GBP51.7m) of cash placed with various counterparties in the form of
margin calls to cover out-of-the-money hedge instruments.
Summary Balance Sheet
Unaudited Audited Change
2016 2015
GBPm GBPm
---------------------------------- ---------- -------- -------
Non-current assets (c) 426.6 302.1 41%
Net current assets(b) 288.9 252.4 14%
Deferred revenue (767.5) (580.3) (32%)
Other liabilities (36.7) (19.4) (89%)
Derivative financial instruments (4.6) (100.4) 95%
Cash and money market deposits 412.0 302.8 36%
---------------------------------- ---------- -------- -------
Total shareholders' equity 318.7 157.2 103%
================================== ========== ======== =======
(a) Cash flows are reported including the movement on money
market deposits (cash deposits with maturity of more than three
months from point of placement) to give readers an understanding of
total cash generation. The Consolidated Cash Flow Statement reports
net cash flow excluding these movements.
(b) Stated excluding cash and cash equivalents, money market
deposits, deferred revenue and derivative financial
instruments.
(c) Stated excluding derivative financial instruments.
The Group is continuing to meet the UK Civil Aviation
Authority's required levels of "available liquidity", which is
defined as free cash plus available undrawn banking facilities.
Total shareholders' equity increased by GBP161.5m (2015: reduced
GBP24.4m) as profit after tax of GBP88.8m (2015: GBP32.8m) was
augmented by favourable movements in the cash flow hedging reserve,
a result of the reversal of adverse net mark-to-market balances on
jet fuel and currency forward contracts held at the end of the
previous financial year.
During the financial year the Group entered into an agreement
with Boeing to purchase 30 new Boeing 737-800NG aircraft to meet
its programme of aircraft fleet replacement and planned Leisure
Travel growth. These aircraft have an approximate list price of USD
2.9 billion, however the Group has negotiated significant discounts
from this price. The aircraft will be funded through a combination
of internal resources and debt and will be delivered between
September 2016 and April 2018.
Segmental Performance - Leisure Travel
The Group's Leisure Travel business which incorporates
Jet2.com,our leading leisure airline and Jet2holidays, our ATOL
licensed package holidays operator, takes customers on holiday to
the Mediterranean, the Canary Islands and to European Leisure
Cities.
Planning efforts were concentrated on improving flight departure
times, our hotel product and increasing the mix of package holiday
customers, resulting in a 22% increase to 1.22m customers (2015:
1.00m) choosing a full package holiday, 40% of total departing
passengers (2015: 33%). The remaining 1.81m departing passengers
chose a flight only (2015: 2.02m).
The average load factor for the year of 92.5% (2015: 91.2%) was
supplemented by a 14% increase in net ticket price per passenger to
GBP91.11 (2015: GBP79.87). The average price of a package holiday
increased by 4% to GBP616.30 (2015: GBP590.69), reflecting not only
increased flight ticket yields but also an increasing number of
customers choosing 4 and 5-star packages as the variety of hotels
we offer continues to grow.
Non-ticket retail revenue per passenger increased by 3% to
GBP31.98 (2015: GBP30.91). This revenue stream, which is primarily
discretionary in nature, continues to be optimised through our
customer contact programme as we focus on Pre-Departure Sales
(principally hold bags and advanced seat assignment) and In-Flight
Sales (pre-ordered meals, drinks, snacks, cosmetics and perfumes)
and ancillary products (car hire and travel insurance).
As a result, total Leisure Travel revenue grew by 15% to
GBP1,261.4m (2015: GBP1,101.5m) whilst operating profit grew 112%
to GBP99.6m (2015 Underlying: GBP46.9m).
The delivery of a smooth customer booking journey is of
paramount importance to the business whichever booking channel is
chosen. As customers' online browsing and purchasing habits evolve,
our websites and mobile applications are continuously developed and
refined by our team of software developers to ensure that the
search and booking experience is as effortless and efficient as
possible, whether the customer uses a PC, tablet or mobile phone.
Approximately half of our package holidays are sold online via
Jet2holidays.com, whilst 99% of our flight-only seats are booked on
the Jet2.com website.
Our customer contact centre in Leeds employs over 300 sales and
customer service advisors. Demanding service levels are maintained
to ensure that customers' calls are answered swiftly. Our sales
colleagues are trained to handle calls in a friendly and
informative manner and to have an intimate knowledge of our
products, so that customers' individual needs can be catered for
and to maximise opportunities for sales conversion. Currently 17%
of package holiday bookings are made through our call centre. Once
a booking has been made, our pre-travel services team takes over,
answering queries and ensuring that customers are updated with
post-booking information or provided with any further pre-travel
assistance as required.
A third of our package holiday sales come through high street
travel agents, who are considered very valuable and important
distribution partners for the business. Our packages are sold by
major travel agent chains, key multiple retailers, homeworker
companies and independent agents.
As it has grown, our Leisure Travel business has continually
invested in marketing and in improving customer service standards.
Jet2holidays benefits from its breadth of hotel choice and a
family-focused approach, which includes free child places at
hundreds of hotels and a consistently low deposit. Repeat bookings
from satisfied customers and our continuing investment in product
and in marketing has paid dividends with bookings for summer 2016
on course to surpass last year, whilst at the same time brand
awareness continues to improve as a result of our broad marketing
strategy.
During the year, Jet2.com expanded its route network, operating
a total of 227 routes (2015: 217). Jet2CityBreaks, which offers a
packaged flight and hotel product in leading European Leisure
Cities proved popular as increasing numbers of customers took the
opportunity to visit some of Europe's most exciting city
destinations.
Investment in our attractive product and depth of service
offering, together with the growing opportunity to cross-sell
between flight-only and package holiday customers means the
business remains confident of delivering its growth plans.
Leisure Travel Financials
Unaudited Audited Audited Audited Change
2016 2015 2015 Separately 2015
Total Before disclosed Total (2016
separately items vs. 2015
disclosed (see note before
items 7) separately
disclosed
items)
GBPm GBPm GBPm GBPm
------------------------------------ ----------
Revenue 1,261.4 1,101.5 - 1,101.5 15%
Net operating expenses (1,161.8) (1,054.6) (17.0) (1,071.6) (10%)
------------------------------------ ---------- ------------ ----------------- ---------- --------------
Operating profit 99.6 46.9 (17.0) 29.9 112%
-
Net financing income 0.5 0.6 - 0.6 (17%)
Revaluation of derivative
hedges - 1.6 - 1.6 (100%)
Net FX revaluation (losses)/gains (1.3) 4.8 - 4.8 (127%)
------------------------------------ ---------- ------------ ----------------- ---------- --------------
Net financing (costs) /
income (0.8) 7.0 - 7.0 (111%)
Profit before tax 98.8 53.9 (17.0) 36.9 83%
Net financing income &
Revaluations 0.8 (7.0) - (7.0) 111%
Depreciation 86.4 69.1 - 69.1 25%
------------------------------------ ---------- ------------ ----------------- ---------- --------------
EBITDA 186.0 116.0 (17.0) 99.0 60%
==================================== ========== ============ ================= ========== ==============
Operating profit margin 7.9% 4.3% - 2.7% 3.6 ppts
Profit before tax margin 7.8% 4.9% - 3.3% 2.9 ppts
EBITDA margin 14.7% 10.5% - 9.0% 4.2 ppts
----------------------------------- ---------- ------------ ----------------- ---------- --------------
Leisure Travel KPIs
Unaudited Audited Change
2016 2015
------------------------------------------------------------- ----------------- ---------- ------------
Owned aircraft at 31 March 45 44 2%
Aircraft on operating leases at 31 March 14 11 27%
Number of routes operated during the
year 227 217 5%
Leisure Travel sector seats available
(capacity) 6.56m 6.63m (1%)
Leisure Travel passenger sectors flown 6.07m 6.05m 0.3%
Leisure Travel load factor 92.5% 91.2% 1.3 ppts
Flight-only passenger sectors flown 3.63m 4.05m (10%)
Package holiday passenger sectors flown 2.44m 2.00m 22%
Package holiday customers 1.22m 1.00m 22%
Net ticket yield per passenger sector
(excl. taxes) GBP91.11 GBP79.87 14%
Average package holiday price GBP616.30 GBP590.69 4%
Non-ticket revenue per passenger sector GBP31.98 GBP30.91 3%
Average hedged price of fuel (US$ per
tonne) $674 $922 27%
Fuel requirement hedged for 2016/17 99% 98% 1.0 ppt
Advance sales made as at 31 March GBP767.5m GBP580.3m 32%
------------------------------------------------------------- ----------------- ---------- ------------
Segmental Performance - Distribution & Logistics
The Group's distribution business, Fowler Welch, is one of the
UK's leading temperature-controlled logistics providers to the food
industry supply chain, serving retailers, processors, growers and
importers across its network of nine distribution sites. A full
range of added value services is provided, including storage,
case-level picking and the packing of fruits, together with an
award winning national distribution network.
Revenue reduced by 5% to GBP144.0m (2015: GBP151.7m) primarily
due to lower fuel costs which were passed onto customers. The
business performed well operationally as varying seasonal volumes
were handled efficiently. Further gains were made as a result of a
concentrated focus on fleet utilisation. In addition, Fowler
Welch's joint venture, Integrated Service Solutions, which stores,
ripens and packs stone-fruit and exotic and organic fruits at
Teynham, Kent contributed positively to the overall result.
Fowler Welch's Kent operations, at its Teynham and Paddock Wood
distribution centres, sit in the heart of that county's fruit
growing areas and their proximity to both the port of Dover and the
Channel Tunnel make them ideally positioned to provide packing and
distribution services for local growers and for fruit and produce
imported from across the Channel. The 50,000 square foot extension
of the Teynham depot has now been completed adding much needed
capacity for further revenue opportunities and the expansion of our
joint venture fruit packing business.
Spalding, our key distribution centre in the major growing
county of Lincolnshire, delivered improved underlying revenue(a) .
This increase was generated both through existing and new customer
volume growth.
The Heywood "Hub", Fowler Welch's 500,000 square foot ambient
(non-temperature-controlled) shared user storage and distribution
centre, located near Bury, Greater Manchester, saw underlying
revenue(a) decrease by 17% year-on-year, reflecting declines within
its customer base. Following a review of the site's product profile
and increased sales efforts this valuable site is attracting
further new customers.
The Hilsea depot, which is located near to Portsmouth
International Port, had a strong year with encouraging underlying
revenue(a) growth of 9.0%. New contract wins and growth with
existing customers underlined the strength of the range of
warehousing, consolidation and distribution services offered.
The dedicated site at Desborough, Northamptonshire, providing
distribution services to a major confectionery manufacturer,
renewed its contract for a further three years. Investment in state
of the art trailers which can be automatically unloaded or used as
a conventional trailer will add value for both this customer and
Fowler Welch over the new three year term. Our regional
distribution sites at Washington, Tyne and Wear and at Newton
Abbot, Devon provide direct store delivery services on behalf of
leading retailers to over 100 stores every day.
Continued focus on building a quality revenue pipeline and
developing creative added value services for its customers remains
fundamental to Fowler Welch's growth strategy. Following the
reporting date, the business completed and successfully implemented
a 10 year commercial venture to provide a transport and
distribution solution for Dairy Crest Limited. This has increased
the core vehicle fleet of Fowler Welch by approximately 10%.
Based at Dairy Crest's National Distribution Centre at Nuneaton
near Coventry, a new region for the business, we expect the
operation to progressively expand using Dairy Crest's products as
the initial volume, as it is integrated into the Fowler Welch
distribution network.
With its strong and committed team, an enhanced national network
of sites and the expertise and flexibility to operate effectively
in both the temperature-controlled (chill and produce) and ambient
arenas, Fowler Welch has a strong operational foundation. The
continued addition of better quality revenue streams, supplemented
by added value, innovative supply services to key customers, such
as those recently implemented for Dairy Crest and our joint venture
fruit packing business, provide us with continued confidence for
the company's future profitable growth.
(a) References to "underlying revenue" are stated excluding fuel
supplement income, which is linked to recognised industry
indices.
Distribution & Logistics Financials
Unaudited Audited Change
2016 2015
GBPm GBPm
------------------------------------- ---------- -------- ---------
Revenue 144.0 151.7 (5%)
Operating expenses (138.6) (148.4) 7%
------------------------------------- ---------- -------- ---------
Operating profit 5.4 3.3 64%
Net financing costs - - -
-------------------------------------
Profit before tax 5.4 3.3 64%
Depreciation 2.3 2.2 5%
------------------------------------- ---------- -------- ---------
EBITDA 7.7 5.5 40%
===================================== ========== ======== =========
Operating profit margin 3.8% 2.2% 1.6 ppts
Profit before tax margin 3.8% 2.2% 1.6 ppts
EBITDA margin 5.3% 3.6% 1.7 ppts
------------------------------------- ---------- -------- ---------
Distribution & Logistics KPIs
Unaudited Audited Change
2016 2015
-------------------------------------- ---------- -------- -------
Warehouse space as at 31 March
(square foot) 847,000 847,000 -
Number of tractor units in operation 428 467 (8%)
Number of trailer units in operation 629 655 (4%)
Miles per gallon 9.1 9.2 (1%)
Annual fleet mileage 39.0m 41.5m (6%)
-------------------------------------- ---------- -------- -------
Gary Brown
Group Chief Financial Officer
14 July 2016
For further information please contact:
Dart Group PLC Tel: 0113 239 7817
Philip Meeson, Group Chairman and Chief
Executive
Gary Brown, Group Chief Financial Officer
Smith & Williamson Corporate Finance Tel: 020 7131 4000
Limited
Nominated Adviser
David Jones / Ben Jeynes / Russell
Cook
Canaccord Genuity - Joint Broker Tel: 020 7523 8000
Guy Marks
Arden Partners - Joint Broker Tel: 020 7614 5900
Christopher Hardie
Buchanan - Financial PR Tel: 020 7466 5000
Richard Oldworth
COnsolidated income statement
for the year ended 31 March 2016
Unaudited Audited
results for results for the
the year ended
year ended 31 March
31 March 2015
2016
------------------------------------------------ ------------------------------------------
Total Results Separately Total
before disclosed
separately items
disclosed
items
GBPm GBPm GBPm GBPm
------------------------------------ ---------- ----------------- ----------- ----------
Revenue 1,405.4 1,253.2 - 1,253.2
Net operating expenses (1,300.4) (1,203.0) (17.0) (1,220.0)
------------------------------------ ---------- ----------------- ----------- ----------
Operating profit 105.0 50.2 (17.0) 33.2
Finance income 2.4 1.7 - 1.7
Finance costs (1.9) (1.1) - (1.1)
Revaluation of derivative
hedges - 1.6 - 1.6
Net FX revaluation (losses)/gains (1.3) 4.8 - 4.8
------------------------------------- ---------- ----------------- ----------- ----------
Net financing (costs)
/ income (0.8) 7.0 - 7.0
Profit before taxation 104.2 57.2 (17.0) 40.2
Taxation (15.4) (10.8) 3.4 (7.4)
------------------------------------ ---------- ----------------- ----------- ----------
Profit for the year 88.8 46.4 (13.6) 32.8
(all attributable to equity shareholders
of the parent)
================================================= ================= =========== ==========
Earnings per share
- basic 60.22 p 31.72 p (9.30)p 22.42 p
- diluted 59.89 p 31.40 p (9.20)p 22.20 p
Consolidated statement of comprehensive income
for the year ended 31 March 2016
Unaudited Audited
year ended year ended
31 March 31 March
2016 2015
GBPm GBPm
------------ ------------
Profit for the year 88.8 32.8
Other comprehensive income / (expense)
Cash flow hedges:
Fair value gains / (losses) in year 19.0 (98.7)
Add back losses transferred to income
statement in year 76.9 32.0
Related tax (charge) / credit (19.2) 13.1
------------ ------------
76.7 (53.6)
Total comprehensive income / (expense)
for the period 165.5 (20.8)
(all attributable to equity shareholders
of the parent)
============ ============
Consolidated Statement of Financial Position
at 31 March 2016
Unaudited Audited
2016 2015
GBPm GBPm
Non-current assets
Goodwill 6.8 6.8
Property, plant and equipment 419.8 295.3
Derivative financial instruments 15.2 1.5
441.8 303.6
---------- --------
Current assets
Inventories 1.1 2.0
Trade and other receivables 503.9 365.6
Derivative financial instruments 49.3 27.0
Money market deposits 70.0 65.5
Cash and cash equivalents 342.0 237.3
---------- --------
966.3 697.4
---------- --------
Total assets 1,408.1 1,001.0
---------- --------
Current liabilities
Trade and other payables 109.4 85.7
Deferred revenue 766.4 579.6
Borrowings 83.4 0.8
Provisions 23.3 28.7
Derivative financial instruments 64.5 103.8
---------- --------
1,047.0 798.6
---------- --------
Non-current liabilities
Other non-current liabilities 0.1 0.5
Deferred revenue 1.1 0.7
Borrowings 7.5 8.2
Derivative financial instruments 4.6 25.1
Deferred tax liabilities 29.1 10.7
---------- --------
42.4 45.2
Total liabilities 1,089.4 843.8
Net assets 318.7 157.2
========== ========
Shareholders' equity
Share capital 1.8 1.8
Share premium 12.4 11.9
Cash flow hedging reserve (3.7) (80.4)
Retained earnings 308.2 223.9
Total shareholders' equity 318.7 157.2
========== ========
consolidated statement of cash flows
for the year ended 31 March 2016
Unaudited Audited
2016 2015
Cash flows from operating activities: GBPm GBPm
Profit on ordinary activities before
taxation 104.2 40.2
Finance income (2.4) (1.7)
Finance costs 1.9 1.1
Revaluation of derivative hedges - (1.6)
Net FX revaluation (losses)/gains 1.3 (4.8)
Depreciation 88.7 71.3
Equity settled share based payments 0.1 0.1
Operating cash flows before movements in
working capital 193.8 104.6
Decrease in inventories 0.9 1.1
Increase in trade and other receivables (138.3) (79.4)
Increase / (decrease) in trade and
other payables 16.6 (24.3)
Increase in deferred revenue 187.2 95.4
(Decrease) / increase in provisions (5.4) 26.3
Cash generated from operations 254.8 123.7
Interest received 2.4 1.7
Interest paid (1.9) (1.1)
Income taxes paid (11.4) (8.2)
Net cash from operating activities 243.9 116.1
---------- --------
Cash flows used in investing activities
Purchase of property, plant and equipment (213.5) (76.4)
Proceeds from sale of property, plant 0.2 -
and equipment
Net increase in money market deposits (4.5) (13.0)
Net cash used in investing activities (217.8) (89.4)
---------- --------
Cash used in financing activities
Repayment of borrowings (0.9) (0.8)
New loans advanced 82.8 -
Proceeds on issue of shares 0.5 0.5
Equity dividends paid (4.6) (4.2)
Net cash from / (used in) financing
activities 77.8 (4.5)
---------- --------
Effect of foreign exchange rate changes 0.8 3.9
Net increase in cash in the year 104.7 26.1
Cash and cash equivalents at beginning
of year 237.3 211.2
Cash and cash equivalents at end
of year 342.0 237.3
========== ========
Consolidated statement of changes in equity
for the year ended 31 March 2016
Share Share Cash flow Retained Total shareholders'
capital premium hedging earnings equity
reserve
GBPm GBPm GBPm GBPm GBPm
--------- --------- ---------- ---------- --------------------
Audited
Balance at 31 March
2014 1.8 11.4 (26.8) 195.2 181.6
Total comprehensive
income for the year - - (53.6) 32.8 (20.8)
Issue of share capital - 0.5 - - 0.5
Dividends paid in
the year - - - (4.2) (4.2)
Share based payments - - - 0.1 0.1
Audited
Balance at 31 March
2015 1.8 11.9 (80.4) 223.9 157.2
Total comprehensive
income for the year - - 76.7 88.8 165.5
Issue of share capital - 0.5 - - 0.5
Dividends paid in
the year - - - (4.6) (4.6)
Share based payments - - - 0.1 0.1
Unaudited
Balance at 31 March
2016 1.8 12.4 (3.7) 308.2 318.7
========= ========= ========== ========== ====================
Notes to the consolidated financial statements
for the year ended 31 March 2016
1. General information
The Group's financial statements consolidate the financial
statements of Dart Group PLC and its subsidiaries and have been
prepared and approved by the Directors in accordance with
International Financial Reporting Standards ("IFRS"), as adopted by
the European Union ("Adopted IFRS").
2. Basis of preparation
The financial statements have been prepared under the historical
cost convention except for all derivative financial instruments,
which have been stated at fair value.
Whilst the information included in this preliminary announcement
has been computed in accordance with Adopted IFRS, this
announcement does not itself contain sufficient information to
comply with Adopted IFRS. Dart Group PLC expects to publish full
financial statements in August 2016 (see note 9).
The Group utilises foreign exchange forward contracts and
monthly fuel swaps to hedge its exposure to movements in euro and
US dollar exchange rates, and its exposure to jet fuel price
movements that arise through its Leisure Travel activities. The
Group also uses forward EU Allowance contracts and forward
Certified Emissions Reduction contracts to hedge exposure to Carbon
Emissions Allowance price volatility. Such derivative financial
instruments are stated at fair value.
Going concern
The Directors have prepared financial forecasts for the Group,
comprising operating profit, balance sheets and cash flows through
to 31 March 2019.
For the purpose of assessing the appropriateness of the
preparation of the Group's accounts on a going concern basis, the
Directors have considered the current cash position, the
availability of banking facilities, the Group's net current
liability position, and sensitised forecasts of future trading
through to 31 March 2019, including performance against financial
covenants and the assessment of principal areas of uncertainty and
risk.
Having considered the points outlined above, the Directors have
a reasonable expectation that the Company and the Group will be
able to operate within the levels of available banking facilities
and cash for the foreseeable future. Consequently, they continue to
adopt the going concern basis in preparing the financial statements
for the year ended 31 March 2016.
3. Segmental reporting
Business segments
The Chief Operating Decision Maker ("CODM") is responsible for
the overall resource allocation and performance assessment of the
Group. The Board of Directors approves major capital expenditure,
assesses the performance of the Group and also determines key
financing decisions. Consequently, the Board of Directors is
considered to be the CODM.
For management purposes, the Group is organised into two
operating segments: Leisure Travel and Distribution &
Logistics. These operating segments are consistent with how
information is presented to the CODM for the purpose of resource
allocation and assessment of their performance and as such, they
are also deemed to be the reporting segments.
The Leisure Travel business specialises in scheduled flights by
its airline Jet2.com to holiday destinations in the Mediterranean,
the Canary Islands and to European Leisure Cities and the provision
of ATOL licensed package holidays by its tour operator
Jet2holidays. Resource allocation decisions are based on the
business's entire route network and the deployment of its entire
aircraft fleet.
The Distribution & Logistics business is run on the basis of
the evaluation of distribution centre-level performance data.
However, resource allocation decisions are made based on the entire
distribution network. The objective in making resource allocation
decisions is to maximise the segment results rather than the
results of the individual distribution centres within the
network.
Group eliminations include the removal of inter-segment asset
and liability balances.
Following the identification of the operating segments, the
Group has assessed the similarity of their characteristics. Given
the different performance targets, customer bases and operating
markets of each, it is not currently appropriate to aggregate the
operating segments for reporting purposes and, therefore, both are
disclosed as reportable segments for the year ended 31 March
2016:
-- Leisure Travel, which incorporates the Group's ATOL licensed
package holidays operator, Jet2holidays and its leisure airline,
Jet2.com; and
-- Distribution & Logistics, incorporating the Group's logistics company, Fowler Welch.
The Board assesses the performance of each segment based on
operating profit, and profit before and after tax. Revenue from
reportable segments is measured on a basis consistent with the
income statement. Revenue is principally generated from within the
UK, the Group's country of domicile.
Segment results, assets and liabilities include items directly
attributable to a segment, as well as those that can be allocated
on a reasonable basis. No customer represents more than 10% of the
Group's revenue.
Leisure Distribution Group Total
Travel & Logistics eliminations
Unaudited
Year ended 31 March GBPm GBPm GBPm GBPm
2016
Revenue 1,261.4 144.0 - 1,405.4
Operating profit 99.6 5.4 - 105.0
Finance income 2.4 - - 2.4
Finance costs (1.9) - - (1.9)
Net FX revaluation
losses (1.3) - - (1.3)
---------- ------------- -------------- ----------
Net financing income (0.8) - - (0.8)
Profit before taxation 98.8 5.4 - 104.2
Taxation (14.5) (0.9) - (15.4)
---------- ------------- -------------- ----------
Profit after taxation 84.3 4.5 - 88.8
========== ============= ============== ==========
Assets and liabilities
Segment assets 1,331.6 82.2 (5.7) 1,408.1
Segment liabilities (1,065.0) (30.1) 5.7 (1,089.4)
---------- ------------- -------------- ----------
Net assets 266.6 52.1 - 318.7
========== ============= ============== ==========
Other segment information
Property, plant and
equipment additions 210.6 2.9 - 213.5
Depreciation, amortisation
and impairment (86.4) (2.3) - (88.7)
Share based payments (0.1) - - (0.1)
Leisure Distribution Group Total
Travel & Logistics eliminations
Audited GBPm GBPm GBPm GBPm
Year ended 31 March
2015
Revenue 1,101.5 151.7 - 1,253.2
Underlying operating
profit 46.9 3.3 - 50.2
Finance income 1.7 - - 1.7
Finance costs (1.1) - - (1.1)
Revaluation of derivative
hedges 1.6 - - 1.6
Net FX revaluation
gains 4.8 - - 4.8
-------------- ------------------- ------------------- ----------------
Net financing income 7.0 - - 7.0
Underlying profit before
taxation 53.9 3.3 - 57.2
Separately disclosed
items (17.0) - - (17.0)
Profit before taxation 36.9 3.3 - 40.2
Taxation (6.7) (0.7) - (7.4)
-------------- ------------------- ------------------- ----------------
Profit after taxation 30.2 2.6 - 32.8
============== =================== =================== ================
Assets and liabilities
Segment assets 923.3 84.2 (6.5) 1,001.0
Segment liabilities (813.7) (36.6) 6.5 (843.8)
-------------- ------------------- ------------------- ----------------
Net assets 109.6 47.6 - 157.2
============== =================== =================== ================
Other segment information
Property, plant and
equipment additions 74.4 2.0 - 76.4
Depreciation, amortisation
and impairment (69.1) (2.2) - (71.3)
Share based payments (0.1) - - (0.1)
4. Net operating expenses
Unaudited Audited
2016 2015
GBPm GBPm
Direct operating costs
Fuel 208.9 233.3
Landing, navigation and third party handling 132.8 137.7
Aircraft and vehicle rentals 38.5 33.7
Maintenance costs 62.4 58.0
Subcontractor charges 38.2 41.0
Accommodation costs 344.0 283.9
Agent commission 29.0 22.5
In-flight cost of sales 19.2 20.3
Other direct operating costs 45.6 42.7
Staff costs 204.4 190.6
Depreciation of property, plant and equipment
including
aircraft and engines 88.7 71.3
Other operating charges 89.7 68.3
Other operating income (1.0) (0.3)
-------------- --------
Net operating expenses before separately
disclosed items 1,300.4 1,203.0
Separately disclosed items (note 7) - 17.0
Total net operating expenses 1,300.4 1,220.0
============== ========
5. Net financing (costs) / income
Unaudited Audited
2016 2015
GBPm GBPm
Finance income 2.4 1.7
Finance costs (1.9) (1.1)
Revaluation of derivative hedges (cash
flow hedge ineffectiveness) - 1.6
Net FX revaluation (losses)/gains (1.3) 4.8
---------- --------
Net financing (costs) / income (0.8) 7.0
========== ========
6. Earnings per share
Unaudited Audited
2016 2015
No. No.
Basic weighted average number of shares
in issue 147,454,373 146,278,585
Dilutive potential ordinary shares:
employee share options 809,398 1,455,645
Diluted weighted average number of shares
in issue 148,263,771 147,734,230
============ ============
Year to Year to
Basis of calculation - earnings (basic 31 March 31 March
and diluted) 2016 2015
Profit for the purposes of calculating GBP88.8m GBP32.8m
basic and diluted earnings
Earnings per share - basic 60.22p 22.42p
Earnings per share - diluted 59.89p 22.20p
7. Separately disclosed items
Separately disclosed items are presented in the middle column of
the year ended 31 March 2015 Consolidated Income Statement in order
to assist the reader's understanding of underlying business
performance and to provide a more meaningful presentation. The
right hand column presents the results for the year showing all
gains and losses recorded in the Consolidated Income Statement.
EU Regulation 261
The prior year results include a separately disclosed
exceptional provision of GBP17.0m, in relation to possible
passenger compensation claims for historical flight delays under
Regulation (EC) No 261/2004.
8. Financial information
The financial information set out above does not constitute Dart
Group PLC's statutory accounts for the years ended 31 March 2016 or
31 March 2015. The financial information for 2015 is derived from
the statutory accounts for the year ended 31 March 2015, which have
been delivered to the Registrar of Companies. The auditor has
reported on the year ended 31 March 2015 accounts; their
report:
i. was unqualified;
ii. did not include a reference to any matters to which the
auditor drew attention by way of emphasis without qualifying their
report; and
iii. did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The statutory accounts for the year ended 31 March 2016 will be
finalised on the basis of the financial information presented by
the directors in this preliminary announcement and will be
delivered to the Registrar of Companies in due course.
9. Annual report and accounts
The 2016 Annual Report and Accounts (together with the Auditor's
Report) will be made available to shareholders during the week
ending 12 August 2016. The Dart Group PLC Annual General Meeting
will be held on 8 September 2016.
10. Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR ZMGMNNFVGVZM
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