TIDMDTG
RNS Number : 1342F
Dart Group PLC
11 July 2019
DART GROUP PLC
PRELIMINARY UNAUDITED RESULTS FOR YEARED 31 MARCH 2019
Dart Group plc, the Leisure Travel and Distribution &
Logistics group ("the Group"), announces its preliminary results
for the year ended 31 March 2019. These results are presented under
International Financial Reporting Standards ("IFRS"), as adopted by
the EU.
Group Financial Highlights Unaudited Restated
(2)
For the year ended 31 March 2019 2018 Change
Revenue GBP3,143.1m GBP2,380.0m 32%
----------------------------------- ------------ ------------ ---------
Operating profit GBP203.4m GBP126.2m 61%
Operating profit margin 6.5% 5.3% 1.2 ppts
----------------------------------- ------------ ------------ ---------
Profit before FX revaluation
and taxation (1) GBP180.1m GBP110.2m 63%
Profit before FX revaluation
and taxation margin 5.7% 4.6% 1.1 ppts
----------------------------------- ------------ ------------ ---------
Profit before taxation GBP177.5m GBP130.2m 36%
Profit before taxation margin 5.6% 5.5% 0.1 ppts
----------------------------------- ------------ ------------ ---------
Basic earnings per share 97.98p 72.16 p 36%
----------------------------------- ------------ ------------ ---------
Proposed final dividend per share 7.4p 6.0p 23%
Resulting total dividend per
share 10.2p 7.5p 36%
----------------------------------- ------------ ------------ ---------
[1] Profit before FX revaluation and taxation is included as an
alternative performance measure in order to aid users in
understanding the ongoing performance of the Group. Further
information can be found in Note 8.
[2] Figures shown for the year ended 31 March 2018 have been
restated to reflect the adoption of IFRS 15 in the current year.
Further information can be found in Note 7.
* Profit before taxation improved by 36% to GBP177.5m (2018:
GBP130.2m). This result includes a GBP2.6m loss on foreign exchange
revaluations (2018: GBP20.0m gain). Before accounting for this
revaluation loss, profit before FX revaluation and taxation
improved by 63% to GBP180.1m (2018: GBP110.2m).
* Our performance reflects the growing success of our Leisure
Travel products - holiday flights with our award-winning airline
Jet2.com and package holidays with our acclaimed tour operator
Jet2holidays - which has led to continuing strong customer demand
for both.
* During the year, Jet2.com flew a total of 12.82m flight-only
and package holiday passengers (one-way passenger sectors) (2018:
10.38m), with our flight-only product enjoyed by 6.49m passengers,
a growth of 21%. Demand for our Real Package Holidays(TM) continued
to grow, as Jet2holidays took 3.17m customers on package holidays
(2018: 2.50m), an increase of 27%.
* Operating losses for the second half of the year increased, as
we continued to invest in additional aircraft and marketing,
together with the increasing cost of retaining and attracting
colleagues in readiness for our expanding Summer 2019 flying
programme.
* Distribution & Logistics profit before tax decreased by
GBP0.1m to GBP4.3m (2018: GBP4.4m) on improved revenues of
GBP178.7m (2018: GBP168.6m), as it continued to attract new
business from both existing and new customers.
* In consideration of these results, the Board is recommending
an increased final dividend of 7.4p per share (2018: 6.0p), which
will bring the total proposed dividend to 10.2p per share for the
year (2018: 7.5p), an increase of 36%.
* Both our Leisure Travel and Distribution & Logistics
businesses have made satisfactory starts to the new financial
year.
* Though overall demand for our leisure travel products has
continued to strengthen since the start of the new financial year,
it is clear from our forward booking trends that generally, less
confident consumers are booking later than last year and therefore
pricing for both our flight-only and package holiday products has
to be continually enticing. Nevertheless, with still some way to go
in the booking cycle, the Board remains optimistic that current
market expectations for Group profit before foreign exchange
revaluations and taxation for the year ending 31 March 2020 will be
met.
* Looking further ahead, the Travel Industry in general is
facing cost pressures in relation to fuel, carbon and other
operating charges which, together with the necessary continued
investment in our own products and operations, including that
required to attract and retain colleagues, are headwinds that the
business faces. However, in the long term we are confident of the
resilience of both our Leisure Travel and Distribution &
Logistics businesses.
* The Group particularly dedicates significant resources to
deliver Real Package Holidays(TM) and we believe we have the
strategy to grow our flight-only and package holiday businesses,
with the products, the people and the proposition to go from
strength to strength. With our Customer focused approach, we are
confident that our customers will continue to be keen to travel
with us from our Rainy Island to the sun spots of the
Mediterranean, the Canary Islands and to European Leisure
Cities.
OUR CHAIRMAN'S STATEMENT
I am pleased to report on the Group's continuing positive
trading performance for the year ended 31 March 2019.
Profit before taxation which includes a GBP2.6m loss for foreign
exchange revaluations (2018: GBP20.0m gain) increased by 36% to
GBP177.5m (2018: GBP130.2m). Before accounting for these
revaluation losses, profit before FX revaluations and taxation
increased by 63% to GBP180.1m (2018: GBP110.2m). Basic earnings per
share increased by 36% to 97.98p (2018: 72.16p).
In consideration of these results, the Board is recommending an
increased final dividend of 7.4p per share (2018: 6.0p), which will
bring the total proposed dividend to 10.2p per share for the year
(2018: 7.5p), an increase of 36%. This final dividend is subject to
shareholders' approval at the Company's Annual General Meeting on 5
September 2019 and will be payable on 25 October 2019 to
shareholders on the register at the close of business on 20
September 2019.
Our performance reflects the growing success of our Leisure
Travel products - holiday flights with our award-winning airline
Jet2.com and package holidays with our acclaimed ATOL (*) licensed
tour operator Jet2holidays - which has led to continuing strong
customer demand for both.
During the year, Jet2.com flew a total of 12.82m flight-only and
package holiday passengers (one-way passenger sectors) (2018:
10.38m), with our flight-only product enjoyed by 6.49m passengers,
a growth of 21%. Demand for our Real Package Holidays(TM) continued
to grow, as Jet2holidays took 3.17m customers on package holidays
(2018: 2.50m), an increase of 27%.
We are an integrated leisure travel provider and this Summer we
will have 100 aircraft in our fleet and are fully in control of our
seat supply. Together with our customer volumes, this allows us to
optimise load factors which are consistently above 90% and to serve
many destinations daily and others several times a week during the
Spring, Summer and Autumn months, offering a great choice of
variable duration holidays at affordable prices, and to deliver the
flexibility that today's holidaymakers require.
Our Distribution & Logistics business, Fowler Welch's ethos
of 'Listening, Responding and Delivering' to customers' needs again
proved successful, as it continued to attract new business from
both existing and new customers. Additional distribution contracts
have also commenced early in the current financial year.
We are proud and pleased that the financial year ended 31 March
2019 saw the start of the Group's Discretionary Colleague Profit
Share Scheme, to reward those colleagues who do not already
participate in performance related bonus or commission schemes and
who have been continuously employed for at least 12 months. The
first payments totalling GBP9.5m (including employer's NI GBP10.8m)
will be made at the end of July 2019 - we are thrilled to be
sharing our success with our fantastic colleagues!
We wouldn't be where we are without the talent and dedication of
our 11,000+ colleagues and one of my greatest pleasures as
Executive Chairman is working with and getting to know so many
enthusiastic and dedicated people throughout our business. Their
commitment to delight the customer is hugely appreciated and is
what drives our continued success. Therefore, I'd like to thank
everyone for another year of determined effort which has delivered
such great progress and financial results.
Leisure Travel
We take people on holiday! Our UK Leisure Travel business
specialises in the provision of scheduled holiday flights by our
award-winning leisure airline, Jet2.com, and ATOL licensed package
holidays by our acclaimed tour operator, Jet2holidays, to
destinations in the Mediterranean, the Canary Islands and to
European Leisure Cities.
We know that taking a holiday is one of the most important
family experiences of the year. We therefore do our very best to
ensure that each of our customers "has a lovely holiday" that can
be both eagerly anticipated and fondly remembered, supported by our
core principles of being family friendly, offering value for money
and giving great customer service.
Putting the customer first is what has driven Jet2's success and
the delivery of great service is at the core of Jet2.com and
Jet2holidays brand values as we recognise that, whether taking a
holiday flight with Jet2.com, or end-to-end Real Package
Holidays(TM) with Jet2holidays, the delivery of an attractive and
memorable holiday experience, engenders loyalty and repeat
bookings. The combined power of our proposition, product, people
and purpose is what will fuel our ongoing success, as we constantly
seek to improve our customers' holiday choice, experience and
enjoyment, giving us the greatest opportunity to retain and attract
new customers - the key to continuing profitable growth!
We continually review and refresh our product offerings, whilst
carefully expanding our resorts presence - our hotel portfolio now
numbers over 4,000 for Summer 2019 (Summer 2018: over 3,400
hotels). We often place substantial deposits to secure dependable
and competitive room offerings in the most attractive properties,
always ensuring that we are satisfying our customers' desire for
choice and quality. Encompassing a wide range of great value 2 to
5-star accommodation, catering for the young, not so young and
families alike, many have adjacent waterparks and other great
attractions included in the package, adding enjoyment and interest
to the overall holiday experience. Over 40% of our Package Holidays
were sold on an all-inclusive basis offering a 'Defined Price' for
the whole holiday experience, including flights, transfers, meals,
drinks for the adults and ice lollies for the kids! This is a
particularly resilient, great value offering for families managing
to a tight budget and is particularly attractive in these times of
economic uncertainty.
Innovation helps to make sure we are truly reflecting diversity
in our product range and allows us to meet our customers'
developing expectations:
-- Our market leading Resort Flight Check-In(R) service, which
allows Jet2holidays' customers to check-in their bags at their
hotel and to enjoy their final day, bag and hassle free before
going to the airport for their flight home, has proved to be an
attractive and valued service engendering great customer feedback.
As a result, we have expanded the service to over 280 hotels for
Summer 2019 (Summer 2018: over 250 hotels) in 44 key holiday
resorts.
-- Jet2Villas, our ATOL protected Jet2.com flight + car + villa
package which launched in June 2017 has also proven very popular
and now offers an increased range of over 2,000 self-catering
villas, many with a private pool, in more than 35 European beach
destinations, all secured with just a GBP60 per person deposit!
-- Jet2CityBreaks, which offers a packaged flight + hotel in
attractive European Leisure Cities continues to grow profitably at
an encouraging rate; and
-- Our Indulgent Escapes brand of hand-picked 5-star hotels for
those who perhaps want more luxury and refinement, goes from
strength to strength.
And, to ensure that each of our customers has a pleasant holiday
experience, in Summer 2019 we will employ nearly 700 in-resort
customer helpers, backed up by 24-hour customer helplines, to give
practical assistance in all eventualities. Together with convenient
airport-to-hotel transfer services, everything is organised to make
our customers' holidays easy and carefree.
Real Package Holidays(TM) are not easily replicated by
non-specialists and take considerable organisation and attention to
detail. To ensure this is as comprehensive as possible,
Jet2holidays employs over 1,000 colleagues developing product,
contracting & administering hotels, managing the finances and
providing operational support.
In Summer 2018, Jet2.com flew 90 aircraft (Summer 2017: 75) from
our nine UK bases. We were very proud to be recognised in the Top
10 Airlines of the World and as both Best Airline - UK and Best
Airline - Europe at the TripAdvisor Travellers' Choice Awards 2019.
In addition, we were once again the Top UK Airline for Punctuality
of flights running on time over the previous 12 months, as measured
by the world's leading travel intelligence company OAG.
We have continued to develop our customer-focused flying
programme into Summer 2019 when the aircraft fleet increases to
100, with a commensurate increase in pilots, engineers and cabin
crew. To ensure we have well trained colleagues to support our
continued growth, our Flight Simulator and Training Centre in
Bradford has recently taken delivery of a fifth flight
simulator.
We are keen to create the right environment for all our
colleagues to thrive and are committed to delivering a balanced
lifestyle. To achieve this, for our aircraft crews we have launched
our "Lifestyle 2020" programme, which is being implemented through
2019 and 2020. The substantial financial investment that this
programme requires highlights our commitment to be a career airline
of choice for all.
Our long-term ambition remains the same - To be the Leading UK
Leisure Travel Business. Jet2holidays has consolidated its position
as the UK's second largest ATOL licensed package holidays operator,
however there is always more we can do as we learn, evolve and
grow. Our business model is unchanged - we continue to focus on
delivering wonderful holiday experiences with priceless memories,
ensuring that the customer remains at the centre of everything we
do. Whilst our flight-only product remains very important, we
believe our package holiday business continues to have increasing
potential. We are fully focused on expanding this offering with 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' strengthens. This gives us every
confidence that we continue to have a bright future in the Leisure
Travel marketplace.
(*) ATOL, which is managed by the UK Civil Aviation Authority
('CAA'), is a statutory licensing scheme which also provides
financial protection to consumers of licensable air travel. As a
licensing scheme it ensures that only businesses regarded as
financially robust and fit can sell licensable travel, and as a
financial protection scheme, it ensures that if an ATOL holder
fails, affected consumers are able to complete their holiday and be
repatriated or, if they cannot get away, receive a full refund.
Distribution & Logistics
Fowler Welch, is one of the UK's leading providers of food
supply-chain distribution & logistics, serving retailers,
processors, growers and importers. A full range of value-added
services is provided, including chilled & ambient storage,
case-level picking, the packing of fruits and our award-winning
national distribution network.
The business operates from nine prime UK distribution sites,
with major temperature-controlled operations in the key produce
growing and importing areas of Spalding in Lincolnshire; Teynham
and Paddock Wood in Kent; and Hilsea near Portsmouth.
Further regional distribution sites are located at Nuneaton near
Coventry; Washington, Tyne and Wear; and at Newton Abbott, Devon.
Ambient (non-temperature-controlled) consolidation and distribution
services are located at Heywood near Bury, Greater Manchester; and
Desborough, Northamptonshire.
In addition, Integrated Service Solutions (ISS), Fowler Welch's
joint venture fruit ripening and packing business at Teynham,
completed its fifth year of successful trading and once again
contributed very positively towards overall Group profitability.
ISS packs in excess of fifty different fruit types which are
imported by its customers from over sixty-five countries. The
company's strong service delivery has resulted in it winning
additional fruits and salads volume over the last year and together
with the management team's focus on automation and technology,
operating and financial performance continues to improve
year-on-year.
The Fowler Welch team constantly strive to add value for our
customers. The receipt of the Temperature Controlled Storage &
Distribution Partnership Award 2018, reflects our ability to tailor
supply chain solutions to a specific need, whilst the provision of
innovative solutions to many customers was recognised at the
Footprint Awards 2019, where Fowler Welch was awarded the
Environmentally Efficient Logistics Award.
By continually developing its revenue pipeline and delivering
value adding, innovative supply chain services, supported by a
strong operational reputation, we believe the outlook for Fowler
Welch continues to be very positive.
Outlook
Both our Leisure Travel and Distribution & Logistics
businesses have made satisfactory starts to the new financial
year.
Though overall demand for our leisure travel products has
continued to strengthen since the start of the new financial year,
it is clear from our forward booking trends that generally, less
confident consumers are booking later than last year and therefore
pricing for both our flight-only and package holiday products has
to be continually enticing. Nevertheless, with still some way to go
in the booking cycle, the Board remains optimistic that current
market expectations for Group profit before foreign exchange
revaluations and taxation for the year ending 31 March 2020 will be
met.
Looking further ahead, the Travel Industry in general is facing
cost pressures in relation to fuel, carbon and other operating
charges which, together with the necessary continued investment in
our own products and operations, including that required to attract
and retain colleagues, are headwinds that the business faces.
However, in the long term we are confident of the resilience of
both our Leisure Travel and Distribution & Logistics
businesses.
The Group particularly dedicates significant resources to
deliver Real Package Holidays(TM) and we believe we have the
strategy to grow our flight-only and package holiday businesses,
with the products, the people and the proposition to go from
strength to strength. With our Customer focused approach, we are
confident that our customers will continue to be keen to travel
with us from our Rainy Island to the sun spots of the
Mediterranean, the Canary Islands and to European Leisure
Cities.
Philip Meeson
Executive Chairman
11 July 2019
BUSINESS & FINANCIAL REVIEW
The Group's financial performance for the year ended 31 March
2019 is reported in line with International Financial Reporting
Standards ("IFRS"), as adopted by the EU.
Summary Income Statement Unaudited Restated
2019 2018
GBPm GBPm Change
---------------------------------- ----------
Revenue 3,143.1 2,380.0 32%
Net operating expenses (2,939.7) (2,253.8) (30%)
---------------------------------- ---------- ---------- ---------
Operating profit 203.4 126.2 61%
Net financing expense (excluding
net FX revaluation) (25.6) (16.3) (57%)
Profit on disposal of property,
plant and equipment 2.3 0.3
---------------------------------- ---------- ---------- ---------
Profit before FX revaluation and
taxation 180.1 110.2 63%
Net FX revaluation (losses) /
gains (2.6) 20.0
Profit before taxation 177.5 130.2 36%
Net financing expense / (income) 28.2 (3.7)
Depreciation 131.5 111.6 18%
EBITDA* 337.2 238.1 42%
================================== ========== ========== =========
Operating profit margin 6.5% 5.3% 1.2 ppts
Profit before FX revaluation and
taxation margin 5.7% 4.6% 1.1 ppts
Profit before taxation margin 5.6% 5.5% 0.1 ppts
EBITDA margin 10.7% 10.0% 0.7 ppts
---------------------------------- ---------- ---------- ---------
* EBITDA is included as an alternative performance measure in
order to aid users in understanding the underlying operating
performance of the Group and growth in profitability of the
operations. Further information can be found in Note 7.
Summer 2018 proved to be a particularly strong season for our
Leisure Travel business, as demand for both our flight-only
offering from Jet2.com and our higher margin package holiday
product from Jet2holidays, proved buoyant throughout. However, the
favourable trading conditions gave way to a more uncertain consumer
environment in the second half of the year, which led to increased
levels of price discounting to achieve the planned growth in
customer volumes. Overall, Leisure Travel revenue increased by 34%
to GBP2,964.4m (2018: GBP2,211.4m), and together with a 6% increase
in Distribution & Logistics revenue to GBP178.7m (2018:
GBP168.6m), Group revenue increased by 32% to GBP3,143.1m (2018:
GBP2,380.0m).
Operating losses for the second half of the year increased, as
we continued to invest in additional aircraft and marketing,
together with the increasing cost of retaining and attracting
colleagues in readiness for our expanding Summer 2019 flying
programme. Notwithstanding these increased losses, overall Group
operating profit for the year increased by 61% to GBP203.4m (2018:
GBP126.2m).
Net financing expense of GBP25.6m (2018: GBP16.3m) is stated
after the receipt of bank interest of GBP10.7m (2018: GBP4.8m) and
after interest payable on loans and finance leases of GBP36.3m
(2018: GBP21.1m), predominantly in relation to borrowings drawn to
fund the acquisition of the Group's new Boeing 737-800NG aircraft
deliveries. In addition, net FX revaluation losses of GBP2.6m
(2018: GBP20.0m net gain) were incurred, arising from the
revaluation of foreign currency denominated monetary balances.
As a result, the Group achieved a statutory profit before
taxation for the year of GBP177.5m (2018: GBP130.2m). Group EBITDA
increased by 42% to GBP337.2m (2018: GBP238.1m). The Group's
effective tax rate of 18% (2018: 18%) was marginally lower than the
19% headline rate of corporation tax due to the recognition of
deferred tax at 17%. Basic earnings per share increased by 36% to
97.98p (2018: 72.16p).
Summary of Cash Flows Unaudited Restated
2019 2018
GBPm GBPm Change
--------------------------------------- ---------- ---------- --------
EBITDA 337.2 238.1 42%
Other P&L adjustments (1.9) 0.1
Movements in working capital 135.0 189.0 (29%)
Interest and taxes (29.4) (12.3) (139%)
--------------------------------------- ---------- ---------- --------
Net cash generated from operating
activities 440.9 414.9 6%
Purchase of property, plant and
equipment (302.3) (411.1) 26%
Movement on borrowings 131.6 329.4 (60%)
Other items (4.5) (13.6) 67%
--------------------------------------- ---------- ---------- --------
Net increase in cash and money market
deposits (a) 265.7 319.6 (17%)
======================================= ========== ========== ========
(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.
The Group generated increased net cash flow from operating
activities of GBP440.9m (2018: GBP414.9m), driven by the Leisure
Travel business trading performance. Total capital expenditure
incurred of GBP302.3m (2018: GBP411.1m) included the purchase of
both new and used Boeing 737-800NG aircraft, continued investment
in the long-term maintenance of our existing aircraft fleet and the
purchase of a fifth flight simulator for our training centre in
Bradford. Investment in technology and various infrastructure
projects across the Group were also undertaken, which included
extending the footprint at Holiday House, our commercial centre in
central Leeds, to fully occupy this seven-floor building and a
replacement roof for Fowler Welch's Heywood depot.
New loans totalling GBP228.3m (2018: GBP458.2m) were drawn down,
as the Group secured both commercial debt and on balance sheet
finance lease funding for the purchase of its new Boeing aircraft
deliveries, offset by GBP96.7m (2018: GBP128.8m) of aircraft loan
repayments. Overall, this resulted in a net cash inflow of
GBP265.7m (2018: GBP319.6m) and an improved year-end gross cash
position, including money market deposits, of GBP1,274.3m (2018:
GBP1,008.6m). Net cash, stated after borrowings of GBP983.1m (2018:
GBP806.6m), was GBP291.2m (2018: GBP202.0m).
At the reporting date, the Group had received payments in
advance of travel from its Leisure Travel customers amounting to
GBP905.9m (2018: GBP777.9m), had no cash restricted by its merchant
acquirers and had no cash placed with counterparties in the form of
margin calls to cover out-of-the-money hedge instruments (2018:
GBPnil). The Group continues to comfortably exceed the UK Civil
Aviation Authority's 'liquidity threshold test'.
Summary Balance Sheet Unaudited Restated
2019 2018
GBPm GBPm Change
---------------------------------- ---------- --------- -------
Non-current assets (b) 1,292.5 1,089.8 19%
Net current assets (c) 58.1 58.4 (1%)
Cash and money market deposits 1,274.3 1,008.6 26%
Deferred revenue (939.9) (807.3) (16%)
Borrowings (983.1) (806.6) (22%)
Deferred taxation (84.1) (68.2) (23%)
Derivative financial instruments (22.4) 39.1 (157%)
Total shareholders' equity 595.4 513.8 16%
================================== ========== ========= =======
(b) Stated excluding derivative financial instruments.
(c) Stated excluding cash and cash equivalents, money market
deposits, deferred revenue, borrowings and derivative financial
instruments.
Total shareholders' equity increased by GBP81.6m (2018:
GBP93.9m) which primarily comprised profit after taxation of
GBP145.6m (2018: GBP107.1m) and an adverse (2018: adverse) movement
in the cash flow hedging reserve. This movement was primarily a
result of in-the-money jet fuel forward contracts held at the end
of the previous financial year which matured during the year.
Segmental Performance - Leisure Travel
The growing awareness and appreciation of our leisure travel
products resulted in an overall 24% increase in passenger sectors
flown to 12.82m (2018: 10.38m). Passengers choosing our important
flight-only product increased by 21% to 6.49m (2018: 5.37m), whilst
customers choosing our higher margin package holiday product
increased by 27% to 3.17m (2018: 2.50m). Package holiday customers
now represent 49% of overall flown customers (2018: 48%). Our two
newest operating bases at Birmingham and London Stansted are
proving popular in just their second year of operation, with many
passengers having chosen Real Package Holidays(TM) with
Jet2holidays.
Average flight-only ticket yield per passenger sector at
GBP81.79 (2018: GBP73.01) was 12% higher compared to the
challenging market experienced in the prior year, with average load
factors increasing to 92.8% (2018: 92.2%) against a 23% increase in
seat capacity.
The increasing mix of Package Holiday customers is pleasing, as
the longer duration, end-to-end holiday experience allows greater
value to be added through product innovation and service at each
point in the customer's journey. This proposition lends itself to
brand loyalty and retention and a better quality of recurring
revenue and profitability, compared to the more impulsive,
price-sensitive, shorter duration, flight-only product.
The percentage of overall package holiday customers taking
shorter duration package holidays increased by 2 percentage points
during the year, whilst the percentage taking all-inclusive
holidays and higher value 4 and 5-star packages has remained
broadly consistent. The cost of acquiring hotel rooms increased
primarily because of the stronger Euro and as a result the overall
average price of a package holiday increased to GBP669 (2018:
GBP633).
Non-ticket retail revenue per passenger grew by 7% to GBP24.07
(2018: GBP22.52). This revenue stream, which is primarily
discretionary in nature, continues to be optimised through our
customer contact programme as we focus on continually developing
our customer services.
Overall, revenue in our Leisure Travel business grew by 34% to
GBP2,964.4m (2018: GBP2,211.4m) at an operating profit margin of
6.7% (2018: 5.5%), resulting in operating profit growth of 63% to
GBP199.1m (2018: GBP121.8m).
We recognise that investing for the long-term success of the
business is essential to stay ahead. For many families, booking a
holiday is the most important purchase of the year and we know that
in an increasingly crowded market, it is vital that customers are
constantly made aware of our brand and product proposition to
consider us when making a booking. We therefore commit significant
marketing investment to ensure our brand building share of voice is
imaginative and strong, whether that be through traditional media
such as TV, radio, newspapers or outdoor advertising, or via social
media channels, video on demand or influencers.
The delivery of a friction-free experience at every stage of the
customer booking journey is of paramount importance, whichever
booking channel is chosen. Over 60% of our package holidays are
sold online via Jet2holidays.com, whilst 91% of our flight-only
seats are booked directly on the Jet2.com website. We know that our
websites and mobile applications must work for everyone, as
customers' online browsing and purchasing habits perpetually evolve
- our shop window is whatever screen a customer is looking at and
we want everyone to be able to find and book our holiday flights
and package holidays quickly and easily. Investment in, and
development of, digital strategy is therefore integral to the
Leisure Travel business and we commit considerable monies 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.
Additionally, we continue to build on the strong foundation of
our existing Customer Relationship Management programme and to
invest in our data science and analytics capability to improve our
recommendations algorithms. Over time this will deliver even more
personalised communications and content to customers to strengthen
our already strong relationships with them.
We also recognise that personal interaction is important for
many customers when making such an important purchase. Our customer
contact centres in Leeds, Manchester and Palma, Majorca, employ
over 350 sales and customer service advisers to ensure customers'
individual needs are catered for. Currently 15% (or approximately
480,000) of our package holiday customers book through this
channel. In addition, approximately a quarter of our package
holiday sales are booked through independent travel agents, who are
considered very valuable and important distribution partners for
our business.
Brand awareness continues to improve as a result of our broad
marketing strategy and attention to customer service, with
increasing repeat bookings from customers satisfied by the overall
product experience. With our sparkling net promoter scores and
Jet2.com & Jet2holidays having recently been awarded Which?
Recommended Provider status, it's a clear endorsement of the VIP
experience we offer, and why we believe the Leisure Travel business
remains well-placed to deliver successfully going forward.
Leisure Travel Financials Unaudited Restated
2019 2018 C
GBPm GBPm Change
------------------------------------- ---------- ---------- ---------
Revenue 2,964.4 2,211.4 34%
Net operating expenses (2,765.3) (2,089.6) (32%)
------------------------------------- ---------- ---------- ---------
Operating profit 199.1 121.8 63%
Net financing expense (excluding
net FX revaluation) (25.6) (16.3) (57%)
Profit on disposal of property,
plant and equipment 2.3 0.3
------------------------------------- ---------- ---------- ---------
Profit before FX revaluation and
taxation 175.8 105.8 66%
Net FX revaluation (losses) / gains (2.6) 20.0
------------------------------------- ---------- ---------- ---------
Profit before taxation 173.2 125.8 38%
Net financing expense / (income) 28.2 (3.7)
Depreciation 128.7 108.9 (18%)
EBITDA 330.1 231.0 43%
===================================== ========== ========== =========
Operating profit margin 6.7% 5.5% 1.2 ppts
Profit before FX revaluation and
taxation margin 5.9% 4.8% 1.1 ppts
Profit before taxation margin 5.8% 5.7% 0.1 ppts
EBITDA margin 11.1% 10.4% 0.7 ppts
------------------------------------- ---------- ---------- ---------
Leisure Travel Key Performance Indicators Unaudited Restated
2019 2018 Change
------------------------------------------- ------------ ------------ ---------
Number of routes operated during
the year 329 306 8%
Leisure Travel sector seats available
(capacity) 13.81m 11.27m 23%
Leisure Travel passenger sectors
flown 12.82m 10.38m 24%
Leisure Travel load factor 92.8% 92.2% 0.6 ppts
Flight-only passenger sectors flown 6.49m 5.37m 21%
Package holiday customers 3.17m 2.50m 27%
Flight-only ticket yield per passenger
sector (excl. taxes) GBP81.79 GBP73.01 12%
Average package holiday price GBP669 GBP633 6%
Non-ticket revenue per passenger
sector * GBP24.07 GBP22.52 7%
Average hedged price of fuel (per
tonne) $604 $516 17%
Fuel requirement hedged - next 12
months 90% 90% -
Advance sales made as at 31 March GBP1,734.5m GBP1,486.6m 17%
------------------------------------------- ------------ ------------ ---------
* Presentation of the Non-ticket revenue per passenger sector
KPI has been adjusted for the impact of IFRS 15 and also to remove
certain non-ticket revenue items included within the Average
package holiday price KPI.
Segmental Performance - Distribution & Logistics
Revenue at Fowler Welch increased by 6% to GBP178.7m (2018:
GBP168.6m) as two significant contracts commenced mid-way through
the financial year, supplemented by organic growth. Operationally,
the business performed well, though varying chilled volume profiles
at certain depots led to some operational inefficiency as customer
service levels were maintained. As a result, profit before taxation
fell slightly by GBP0.1m to GBP4.3m (2018: GBP4.4m).
Our Spalding depot located in the major growing and key food
producing region of Lincolnshire, is one of the largest chilled
food consolidation warehouses in the UK and is the largest chilled
site in the Fowler Welch network. Following investment in the
previous financial year to create a more efficient and modern
environment, revenue in the year to 31 March 2019 grew by 2.4% as
new long-term customer contracts were secured. This operation now
distributes over 60,000 pallets each week. The benefit of the new
contracts will be greater in the current financial year due to the
full-year volume effect and the non-recurrence of start-up
costs.
Revenue growth of 2.7% from our Kent distribution facilities at
Teynham and Paddock Wood was driven by incremental volume from
existing customers. These distribution facilities 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
businesses producing locally and for fruit and produce imported
from across the English Channel.
The performance of Integrated Service Solutions (ISS), Fowler
Welch's joint venture operation at Teynham, which ripens, grades
and packs a variety of stone fruit, berries and exotic fruits, was
particularly pleasing. The business delivered a significant
year-on-year revenue increase underpinned by a growth in berry
categories which led to improved profitability. Further product
packing opportunities place ISS in a strong position for the
future.
The Hilsea depot, which is located near to Portsmouth
International Port, achieved a revenue increase of 10% as it
benefited from growth across several suppliers, demonstrating the
importance of this region in providing salads, herbs and vegetables
to UK retailers and underlining the strength of the range of
warehousing, consolidation and distribution services offered.
The regional distribution centres at Washington in Tyne and Wear
and Newton Abbot, near Exeter in Devon continued to provide high
quality direct store delivery services to over 100 supermarkets and
both sites achieved improved profit performance year on year.
A strong revenue pipeline at our operation at Nuneaton saw
several new customers added towards the end of the financial year,
with others implemented at the start of the current financial
year.
Our 500,000 square foot ambient (non-temperature controlled)
shared user distribution facility at Heywood near Bury, Greater
Manchester made good progress in the year. Investment in the site
has delivered an improvement to operational service, with a
subsequent improvement to financial performance towards the end of
the year. This positive momentum is expected to continue into the
current financial year.
With its strong and committed team, and the expertise and
flexibility to operate effectively in both the
temperature-controlled (chilled and produce) and ambient arenas, we
remain confident in the future growth prospects for Fowler
Welch.
Distribution & Logistics Financials Unaudited
2019 2018
GBPm GBPm Change
------------------------------------- ---------- -------- -----------
Revenue 178.7 168.6 6%
Net operating expenses (174.4) (164.2) (6%)
------------------------------------- ---------- -------- -----------
Operating profit 4.3 4.4 (2%)
Net financing expense - -
-------------------------------------
Profit before taxation 4.3 4.4 (2%)
Depreciation 2.8 2.7 4%
------------------------------------- ---------- -------- -----------
EBITDA 7.1 7.1 -
===================================== ========== ======== ===========
Operating profit margin 2.4% 2.6% (0.2 ppts)
Profit before taxation margin 2.4% 2.6% (0.2 ppts)
EBITDA margin 4.0% 4.2% (0.2 ppts)
------------------------------------- ---------- -------- -----------
Distribution & Logistics Key Performance Unaudited
Indicators
2019 2018 Change
------------------------------------------ ---------- -------- -------
Warehouse space as at 31 March (square
feet) 897,000 897,000 -
Number of tractor units in operation 530 515 3%
Number of trailer units in operation 764 742 3%
Miles per gallon 9.7 9.7 -
Annual fleet mileage 49.9m 49.4m 1%
------------------------------------------ ---------- -------- -------
Gary Brown
Group Chief Financial Officer
11 July 2019
For further information please contact:
Dart Group plc
Philip Meeson, Executive Chairman
Gary Brown, Group Chief Financial
Officer 0113 239 7817
Cenkos Securities plc
Nominated Adviser
David Jones / Katy Birkin 020 7397 8900
Canaccord Genuity
Joint Broker
Adam James 020 7523 8000
Arden Partners
Joint Broker
Tom Price / Simon Johnson 020 7614 5900
Buchanan
Financial PR
Richard Oldworth 020 7466 5000
This announcement may include statements that are, or may be
deemed to be, "forward-looking statements" (including words such as
"believe", "expect", "estimate", "intend", "anticipate" and words
of similar meaning). By their nature, forward-looking statements
involve risk and uncertainty since they relate to future events and
circumstances, and actual results may, and often do, differ
materially from any forward-looking statements. Any forward-looking
statements in this announcement reflect management's view with
respect to future events as at the date of this announcement. Save
as required by applicable law, the Company undertakes no obligation
to publicly revise any forward-looking statements in this
announcement, whether following any change in its expectations or
to reflect events or circumstances after the date of this
announcement.
COnsolidated income statement
for the year ended 31 March 2019
Unaudited Restated
Results Results
for the for the
year ended year ended
31 March 31 March
2019 2018
GBPm GBPm
----------------------------------------- ------------ ------------
Revenue 3,143.1 2,380.0
Net operating expenses (2,939.7) (2,253.8)
------------------------------------------ ------------ ------------
Operating profit 203.4 126.2
Finance income 10.7 4.8
Finance expense (36.3) (21.1)
Net FX revaluation (losses) / gains (2.6) 20.0
------------------------------------------ ------------ ------------
Net financing (expense) / income (28.2) 3.7
Profit on disposal of property,
plant and equipment 2.3 0.3
Profit before taxation 177.5 130.2
Taxation (31.9) (23.1)
------------------------------------------ ------------ ------------
Profit for the year 145.6 107.1
all attributable to equity shareholders
of the parent
========================================= ============ ============
Earnings per share
- basic 97.98p 72.16p
- diluted 97.68p 71.83p
------------------------------------------ ------------ ------------
Consolidated statement of comprehensive income
for the year ended 31 March 2019
Unaudited Restated
year ended year ended
31 March 31 March
2019 2018
GBPm GBPm
------------------------------------------- ------------ ------------
Profit for the year 145.6 107.1
Other comprehensive (expense) / income
Items that are or may be reclassified
subsequently to profit or loss:
Cash flow hedges:
Fair value (losses) / gains (37.9) 50.6
Add back gains transferred to income
statement (23.6) (58.7)
Related taxation credit 11.4 1.5
Revaluation of foreign operations (1.3) 0.7
------------------------------------------- ------------ ------------
(51.4) (5.9)
Total comprehensive income for the period 94.2 101.2
all attributable to equity shareholders
of the parent
=========================================== ============ ============
Consolidated Statement of Financial Position
at 31 March 2019
Unaudited Restated
2019 2018
GBPm GBPm
Non-current assets
Goodwill 6.8 6.8
Property, plant and equipment 1,285.7 1,083.0
Derivative financial instruments 4.1 23.7
----------------------------------- ----------
1,296.6 1,113.5
---------------------------------- ---------- ---------
Current assets
Inventories 1.6 1.8
Trade and other receivables 319.8 258.2
Derivative financial instruments 50.0 64.3
Money market deposits 50.0 220.2
Cash and cash equivalents 1,224.3 788.4
----------------------------------- ---------- ---------
1,645.7 1,332.9
---------------------------------- ---------- ---------
Total assets 2,942.3 2,446.4
----------------------------------- ---------- ---------
Current liabilities
Trade and other payables 217.0 159.9
Deferred revenue 937.1 806.0
Borrowings 74.4 88.6
Provisions and liabilities 46.3 41.7
Derivative financial instruments 55.0 40.7
----------------------------------- ---------- ---------
1,329.8 1,136.9
---------------------------------- ---------- ---------
Non-current liabilities
Deferred revenue 2.8 1.3
Borrowings 908.7 718.0
Derivative financial instruments 21.5 8.2
Deferred taxation 84.1 68.2
----------------------------------- ---------- ---------
1,017.1 795.7
---------------------------------- ---------- ---------
Total liabilities 2,346.9 1,932.6
----------------------------------- ---------- ---------
Net assets 595.4 513.8
=================================== ========== =========
Shareholders' equity
Share capital 1.9 1.9
Share premium 12.8 12.7
Cash flow hedging reserve (18.5) 31.6
Other reserves (0.6) 0.7
Retained earnings 599.8 466.9
Total shareholders' equity 595.4 513.8
=================================== ========== =========
consolidated statement of cash flows
for the year ended 31 March 2019
Unaudited Restated
2019 2018
GBPm GBPm
Profit on ordinary activities before
taxation 177.5 130.2
Finance income (10.7) (4.8)
Finance expense 36.3 21.1
Net FX revaluation losses / (gains) 2.6 (20.0)
Depreciation 131.5 111.6
Profit on disposal of property, plant
and equipment (2.3) (0.3)
Equity settled share based payments 0.4 0.4
Operating cash flows before movement
in working capital 335.3 238.2
------------------------------------------- ---------- ---------
Decrease / (increase) in inventories 0.2 (0.6)
Increase in trade and other receivables (61.6) (52.6)
Increase in trade and other payables 60.3 27.8
Increase in deferred revenue 132.6 209.9
Increase in provisions and liabilities 3.5 4.5
Cash generated from operations 470.3 427.2
------------------------------------------- ---------- ---------
Interest received 10.7 4.8
Interest paid (32.3) (17.2)
Income taxes (paid) / received (7.8) 0.1
Net cash generated from operating
activities 440.9 414.9
------------------------------------------- ---------- ---------
Cash flows used in investing activities
Purchase of property, plant and equipment (302.3) (411.1)
Proceeds from sale of property, plant
and equipment 3.5 0.3
Net decrease / (increase) in money
market deposits 170.2 (19.9)
Net cash used in investing activities (128.6) (430.7)
------------------------------------------- ---------- ---------
Cash from financing activities
Repayment of borrowings (96.7) (128.8)
New loans advanced 228.3 458.2
Proceeds on issue of shares 0.1 0.3
Equity dividends paid (13.1) (8.0)
Net cash from financing activities 118.6 321.7
------------------------------------------- ---------- ---------
Net increase in cash in the year 430.9 305.9
Cash and cash equivalents at beginning
of year 788.4 488.7
Effect of foreign exchange rate changes 5.0 (6.2)
Cash and cash equivalents at end
of year 1,224.3 788.4
=========================================== ========== =========
Consolidated statement of changes in equity
for the year ended 31 March 2019
Share Share Cash Other Retained Total shareholders'
capital premium flow reserves earnings equity
hedging
reserve
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------ --------- --------- --------- ---------- ---------- --------------------
Balance at 31 March
2017
- as originally
reported 1.8 12.5 38.2 - 378.9 431.4
Effect of transition
to IFRS 15 - - - - (11.5) (11.5)
Balance at 31 March
2017 - as restated 1.8 12.5 38.2 - 367.4 419.9
Total comprehensive
income - - (6.6) 0.7 107.1 101.2
Issue of share capital 0.1 0.2 - - - 0.3
Dividends paid in
the year - - - - (8.0) (8.0)
Share based payments - - - - 0.4 0.4
Balance at 31 March
2018 -
as restated 1.9 12.7 31.6 0.7 466.9 513.8
Total comprehensive
income - - (50.1) (1.3) 145.6 94.2
Issue of share capital - 0.1 - - - 0.1
Dividends paid in
the year - - - - (13.1) (13.1)
Share based payments - - - - 0.4 0.4
Unaudited Balance
at
31 March 2019 1.9 12.8 (18.5) (0.6) 599.8 595.4
======================== ========= ========= ========= ========== ========== ====================
Notes to the UNAUDITED PRELIMINARY ANNOUNCEMENT
for the year ended 31 March 2019
1. Accounting policies and general information
Basis of preparation
The Group's condensed consolidated financial information has
been prepared and approved by the Board of Directors in accordance
with International Financial Reporting Standards, as adopted by the
European Union ("Adopted IFRS") and with those parts of the
Companies Act 2006 applicable to the companies reporting under
IFRS.
Whilst the information included in this preliminary announcement
has been prepared in accordance with Adopted IFRS, the financial
information contained within this preliminary announcement for the
years ended 31 March 2019 and 31 March 2018 does not itself contain
sufficient information to comply with Adopted IFRS and nor does it
comprise statutory financial statements within the meaning of
section 434 of the Companies Act 2006.
The financial information for 2018 is derived from the statutory
accounts for the year ended 31 March 2018, which have been
delivered to the Registrar of Companies. The Auditor has reported
on the year ended 31 March 2018 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.
In this report, the comparative figures for the year ended 31
March 2018 have been restated for the impact of IFRS 15 and for the
revised presentation of accrued and deferred revenue - see note 7
for further details.
The statutory accounts for the year ended 31 March 2019 will be
finalised on the basis of the financial information presented by
the Board of Directors in this preliminary announcement and will be
delivered to the Registrar of Companies in due course.
The 2019 Annual Report and Accounts (including the Auditor's
Report) will be made available to shareholders during the week
commencing 12 August 2019. The Dart Group plc Annual General
Meeting will be held on 5 September 2019.
The financial information has been prepared under the historical
cost convention except for all derivative financial instruments,
which have been measured at fair value.
The Group's financial information is presented in pounds
sterling and all values are rounded to the nearest GBP100,000
except where indicated otherwise.
Going concern
The Directors have prepared financial forecasts for the Group,
comprising profit before and after taxation, balance sheets and
cash flows through to 31 March 2022.
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 and sensitised forecasts of
future trading through to 31 March 2022, including performance
against financial covenants, the implications, including those
considered remote, of Brexit and the assessment of principal areas
of risk and uncertainty.
Having considered the points above, the Directors have a
reasonable expectation that the Group as a whole has adequate
resources to continue in operational existence for a period of 12
months from the date of approval of the financial statements. For
this reason, they continue to adopt the going concern basis in
preparing the financial statements for the year ended 31 March
2019.
2. New IFRS effective in the current year
Both IFRS 15 Revenue from Contracts with Customers and IFRS 9
Financial Instruments became mandatorily effective in the current
year. These standards apply to accounting periods beginning after
January 2018.
IFRS 15 Revenue from Contracts with Customers
The Group has adopted IFRS 15 for the year ended 31 March 2019
and has applied the fully retrospective transition method, with the
comparative year and opening net assets (as at 1 April 2017)
restated. This new standard supersedes all existing revenue
requirements in IFRS. Its core principle is that an entity should
recognise revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration
to which the entity expects to be entitled in exchange for those
goods or services.
IFRS 15 discusses whether a contract contains more than one
distinct good or service. In light of this guidance, the Group
considered whether its package holidays offering contained more
than one promised service, and concluded that a package holiday
constituted delivery of one distinct performance obligation
including flights, accommodation, transfers and other
holiday-related services.
Under IFRS 15, revenues are recognised when a performance
obligation is satisfied, which happens when control of the goods or
services underlying the particular performance obligation is
transferred to the customer. The impact of this for the Leisure
Travel business is to defer the recognition of certain non-ticket
revenue streams to the date of departure rather than the date of
booking. The revenue associated with Package Holidays is now
apportioned over the duration of the holiday, where it was
previously recognised on departure. The performance obligations for
the Distribution & Logistics business have also been
considered, and there are no changes in the timing of revenue
recognition as a result of implementing IFRS 15.
In addition, a proportion of flight delay compensation payments
made to customers, previously recorded wholly within net operating
expenses, are now offset against revenues up to the full value of
the ticket price. This presentational change has reduced revenue
where the performance obligation has not been fully satisfied, but
has a net nil impact on the overall profit for the period.
The impact on the Group's financial information for the year
ended 31 March 2018 is shown in Note 7.
IFRS 9 Financial Instruments
The Group has also adopted IFRS 9 for the year ended 31 March
2019. This new standard replaces current guidance provided by IAS
39 on classification and measurement of financial assets and
liabilities. In addition, IFRS 9 includes new requirements for
general hedge accounting and impairment of financial assets.
Under IFRS 9, all recognised financial assets within scope are
required to be subsequently measured at amortised cost or fair
value. The classification of each financial asset is based on
whether the business model of the Group is to hold assets to
collect contractual cash flows or to benefit from changes in the
fair value of assets. The Group financial information has not been
impacted by this change.
The impairment model under IFRS 9 reflects expected credit
losses, as opposed to only incurred credit losses under IAS 39. The
Group has applied the practical expedient afforded by IFRS 9 in
calculating credit losses and therefore has not recorded any
changes to its current impairment calculations.
Finally, under IFRS 9, greater flexibility has been introduced
to the types of transactions eligible for hedge accounting. This
new guidance is aligned with the Group's current hedging policy and
therefore does not result in any material changes.
Overall, there is no impact on the Group's net assets or profit
for the period on transition to IFRS 9.
3. Segmental reporting
IFRS 8 Operating Segments requires operating segments to be
determined based on the Group's internal reporting to the Chief
Operating Decision Maker. 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 Board of
Directors (the Chief Operating Decision Maker) for the purpose of
resource allocation and assessment of their performance and as
such, they are also deemed to be the reporting segments.
Intra-group balances and transactions, and any unrealised income
and expenses arising from intra-group transactions, are eliminated
on consolidation.
Leisure Distribution Group Total
Travel & Logistics eliminations
Unaudited GBPm GBPm GBPm GBPm
Year ended 31 March 2019
Revenue 2,964.4 178.7 - 3,143.1
Operating profit 199.1 4.3 - 203.4
Finance income 10.7 - - 10.7
Finance expense (36.3) - - (36.3)
Net FX revaluation losses (2.6) - - (2.6)
--------------------------------- ---------- ------------- -------------- ----------
Net financing expense (28.2) - - (28.2)
Profit on disposal of property,
plant and equipment 2.3 - - 2.3
--------------------------------- ---------- ------------- -------------- ----------
Profit before taxation 173.2 4.3 - 177.5
Taxation (31.1) (0.8) - (31.9)
--------------------------------- ---------- ------------- -------------- ----------
Profit after taxation 142.1 3.5 - 145.6
================================= ========== ============= ============== ==========
Assets and liabilities
Segment assets 2,854.9 87.4 - 2,942.3
Segment liabilities (2,322.7) (24.2) - (2,346.9)
--------------------------------- ---------- ------------- -------------- ----------
Net assets 532.2 63.2 - 595.4
================================= ========== ============= ============== ==========
Other segment information
Property, plant and equipment
additions 299.4 2.9 - 302.3
Depreciation, amortisation
and impairment (128.7) (2.8) - (131.5)
Share based payments (0.3) (0.1) - (0.4)
Restated Distribution Group Restated
Leisure & Logistics eliminations Total
Travel
Year ended 31 March 2018 GBPm GBPm GBPm GBPm
Revenue 2,211.4 168.6 - 2,380.0
Operating profit 121.8 4.4 - 126.2
Finance income 4.8 - - 4.8
Finance expense (21.1) - - (21.1)
Net FX revaluation gains 20.0 - - 20.0
--------------------------------- ---------- ------------- -------------- ----------
Net financing income 3.7 - - 3.7
Profit on disposal of property,
plant and equipment 0.3 - - 0.3
--------------------------------- ---------- ------------- -------------- ----------
Profit before taxation 125.8 4.4 - 130.2
Taxation (22.4) (0.7) - (23.1)
--------------------------------- ---------- ------------- -------------- ----------
Profit after taxation 103.4 3.7 - 107.1
================================= ========== ============= ============== ==========
Assets and liabilities
Segment assets 2,364.8 86.5 (4.9) 2,446.4
Segment liabilities (1,910.6) (26.9) 4.9 (1,932.6)
--------------------------------- ---------- ------------- -------------- ----------
Net assets 454.2 59.6 - 513.8
================================= ========== ============= ============== ==========
Other segment information
Property, plant and equipment
additions 405.2 5.9 - 411.1
Depreciation, amortisation
and impairment (108.9) (2.7) - (111.6)
Share based payments (0.3) (0.1) - (0.4)
4. Net operating expenses
Unaudited Restated
2019 2018
GBPm GBPm
Direct operating costs
Accommodation costs 1,102.9 831.9
Fuel 305.8 222.3
Landing, navigation and third-party handling 279.4 219.4
Maintenance costs 109.8 77.7
Aircraft and vehicle rentals 75.9 63.1
Agent commission 59.8 48.1
In-flight cost of sales 46.5 35.4
Subcontractor charges 42.4 40.3
Other direct operating costs 116.7 85.5
Staff costs including agency staff 439.9 336.8
Depreciation of property, plant and equipment 131.5 111.6
Other operating charges 232.4 183.9
Other operating income (3.3) (2.2)
------------------------------------------------- ---------- ---------
Total net operating expenses 2,939.7 2,253.8
================================================= ========== =========
5. Net financing (expense) / income
Unaudited
2019 2018
GBPm GBPm
Finance income 10.7 4.8
Interest payable on aircraft and other
loans (16.3) (13.0)
Interest payable on obligations under
finance leases (20.0) (8.1)
Net foreign exchange revaluation (losses)
/ gains (2.6) 20.0
------------------------------------------- ---------- -------
Net financing (expense) / income (28.2) 3.7
=========================================== ========== =======
6. Earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to the equity owners of the parent company by the
weighted average number of ordinary shares in issue during the
year.
Diluted earnings per share is calculated by dividing the profit
attributable to the equity owners of the parent company by the
weighted average number of ordinary shares in issue during the
year, adjusted for the effects of potentially dilutive
instruments.
As originally
Unaudited Restated reported
2019 2018 2018
Earnings Weighted EPS Earnings Weighted EPS EPS
GBPm average pence GBPm average pence pence
number number
of shares of shares
Basic EPS
Profit attributable
to ordinary
shareholders 145.6 148,698,533 97.98 107.1 148,415,077 72.16 74.59
--------------------- --------- ------------ ------- --------- ------------ ------- --------------
Effect of dilutive
instruments
Share options
and deferred
awards - 455,530 (0.30) - 682,262 (0.33) (0.34)
Diluted EPS 145.6 149,154,063 97.68 107.1 149,097,339 71.83 74.25
--------------------- --------- ------------ ------- --------- ------------ ------- --------------
7. Restatement of prior year information
The following tables summarise restatement of previously
reported financial information.
Consolidated Income Statement
for the year ended 31 March
2018
--------------------------------- ------------ -------------------- --------------
Year ended Year ended Year ended
31 March 31 March 31 March
2018 2018 2018
As restated IFRS 15 Adjustments As originally
reported
GBPm GBPm GBPm
--------------------------------- ------------ -------------------- --------------
Revenue 2,380.0 (11.8) 2,391.8
Net operating expenses (2,253.8) 7.4 (2,261.2)
---------------------------------- ------------ -------------------- --------------
Operating profit 126.2 (4.4) 130.6
Finance income 4.8 - 4.8
Finance expense (21.1) - (21.1)
Net FX revaluation gains 20.0 - 20.0
---------------------------------- ------------ -------------------- --------------
Net financing income 3.7 - 3.7
Profit on disposal of property,
plant and equipment 0.3 - 0.3
---------------------------------- ------------ -------------------- --------------
Profit before taxation 130.2 (4.4) 134.6
Taxation (23.1) 0.8 (23.9)
Profit for the period 107.1 (3.6) 110.7
================================== ============ ==================== ==============
Total comprehensive income
for the period 101.2 (3.6) 104.8
============================= ====== ====== ======
The impact of IFRS 15 is:
-- to defer the recognition of certain non-ticket revenue
streams to the date of departure rather than the date of booking,
resulting in a reduction in revenue and an increase in deferred
revenue;
-- to apportion the revenue associated with Package Holidays
over the duration of the holiday, where it was previously
recognised on departure, resulting in a reduction in revenue and an
increase in deferred revenue. The costs of a Package Holiday are
also apportioned over the duration of the holiday, resulting in a
reduction in net operating expenses and a decrease in accruals;
and
-- to offset a proportion of flight delay compensation payments
made to customers, previously recorded wholly within net operating
expenses, against revenue up to the full value of the ticket price,
resulting in a reduction in revenue and a reduction in net
operating expenses.
Consolidated Statement of Financial Position
at 31 March 2018
Year ended Year ended Year ended Year ended
31 March 31 March 31 March 31 March
2018 2018 2018 2018
As restated Accrued revenue IFRS 15 Adjustments As originally
restatement reported
GBPm GBPm GBPm GBPm
----------------------------- ------------ ---------------- -------------------- --------------
Non-current assets
Goodwill 6.8 - - 6.8
Property, plant and
equipment 1,083.0 - - 1,083.0
Derivative financial
instruments 23.7 - - 23.7
1,113.5 - - 1,113.5
----------------------------- ------------ ---------------- -------------------- --------------
Current assets
Inventories 1.8 - - 1.8
Trade and other receivables 258.2 (679.2) - 937.4
Derivative financial
instruments 64.3 - - 64.3
Money market deposits 220.2 - - 220.2
Cash and cash equivalents 788.4 - - 788.4
1,332.9 (679.2) - 2,012.1
----------------------------- ------------ ---------------- -------------------- --------------
Total assets 2,446.4 (679.2) - 3,125.6
----------------------------- ------------ ---------------- -------------------- --------------
Current liabilities
Trade and other payables 159.9 - (12.4) 172.3
Deferred revenue 806.0 (675.4) 30.8 1,450.6
Borrowings 88.6 - - 88.6
Provisions and liabilities 41.7 - - 41.7
Derivative financial
instruments 40.7 - - 40.7
1,136.9 (675.4) 18.4 1,793.9
----------------------------- ------------ ---------------- -------------------- --------------
Non-current liabilities
Deferred revenue 1.3 (3.8) - 5.1
Borrowings 718.0 - - 718.0
Derivative financial
instruments 8.2 - - 8.2
Deferred taxation 68.2 - (3.3) 71.5
795.7 (3.8) (3.3) 802.8
----------------------------- ------------ ---------------- -------------------- --------------
Total liabilities 1,932.6 (679.2) 15.1 2,596.7
----------------------------- ------------ ---------------- -------------------- --------------
Net assets 513.8 - (15.1) 528.9
============================= ============ ================ ==================== ==============
Shareholders' equity
Share capital 1.9 - - 1.9
Share premium 12.7 - - 12.7
Cash flow hedging reserve 31.6 - - 31.6
Other reserves 0.7 - - 0.7
Retained earnings 466.9 - (15.1) 482.0
----------------------------- ------------ ---------------- -------------------- --------------
Total shareholders'
equity 513.8 - (15.1) 528.9
============================= ============ ================ ==================== ==============
In previous years, balance payments not yet due or invoiced for
package holidays were recognised on booking within trade
receivables, with a corresponding balance in deferred revenue. As
these payments are not yet due, an adjustment has been made to
remove the receivable for balance payments not yet due or invoiced
and the associated entry in deferred revenue. This amended
presentation is in line with standard industry practices.
Consolidated Statement of Financial Position
at 31 March 2017
Year ended Year ended Year ended Year ended
31 March 31 March 31 March 31 March
2017 2017 2017 2017
As restated Accrued revenue IFRS 15 Adjustments As originally
restatement reported
GBPm GBPm GBPm GBPm
----------------------------- ------------ ---------------- -------------------- --------------
Non-current assets
Goodwill 6.8 - - 6.8
Property, plant and
equipment 806.5 - - 806.5
Derivative financial
instruments 9.3 - - 9.3
822.6 - - 822.6
----------------------------- ------------ ---------------- -------------------- --------------
Current assets
Inventories 1.2 - - 1.2
Trade and other receivables 206.4 (501.4) - 707.8
Derivative financial
instruments 74.7 - - 74.7
Money market deposits 200.3 - - 200.3
Cash and cash equivalents 488.7 - - 488.7
971.3 (501.4) - 1,472.7
----------------------------- ------------ ---------------- -------------------- --------------
Total assets 1,793.9 (501.4) - 2,295.3
----------------------------- ------------ ---------------- -------------------- --------------
Current liabilities
Trade and other payables 129.7 - (6.6) 136.3
Deferred revenue 596.6 (500.3) 20.6 1,076.3
Borrowings 129.6 - - 129.6
Provisions and liabilities 38.8 - - 38.8
Derivative financial
instruments 15.9 - - 15.9
910.6 (500.3) 14.0 1,396.9
----------------------------- ------------ ---------------- -------------------- --------------
Non-current liabilities
Deferred revenue 0.6 (1.1) - 1.7
Borrowings 390.9 - - 390.9
Derivative financial
instruments 20.9 - - 20.9
Deferred taxation 51.0 - (2.5) 53.5
463.4 (1.1) (2.5) 467.0
----------------------------- ------------ ---------------- -------------------- --------------
Total liabilities 1,374.0 (501.4) 11.5 1,863.9
----------------------------- ------------ ---------------- -------------------- --------------
Net assets 419.9 - (11.5) 431.4
============================= ============ ================ ==================== ==============
Shareholders' equity
Share capital 1.8 - - 1.8
Share premium 12.5 - - 12.5
Cash flow hedging reserve 38.2 - - 38.2
Other reserves - - - -
Retained earnings 367.4 - (11.5) 378.9
----------------------------- ------------ ---------------- -------------------- --------------
Total shareholders'
equity 419.9 - (11.5) 431.4
============================= ============ ================ ==================== ==============
8. Alternative performance measures
The Group's alternative performance measures are not defined by
IFRS and therefore may not be directly comparable with other
companies' alternative performance measures. These measures are not
intended to be a substitute for, or superior to, IFRS
measurements.
Profit before FX revaluation and taxation
Profit before FX revaluation and taxation is included as an
alternative performance measure in order to aid users in
understanding the underlying operating performance of the Group
excluding the impact of foreign exchange volatility.
This is reconciled to the IFRS measure of profit before taxation
as part of the Summary Income Statement within the Business and
Finance Review.
EBITDA
Earnings before interest, tax, depreciation and amortisation
(EBITDA) is included as an alternative performance measure in order
to aid users in understanding the underlying operating performance
of the Group and growth in profitability of the operations.
This is reconciled to the IFRS measure of profit before taxation
as part of the Summary Income Statement within the Business and
Finance Review.
9. 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 news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR ZMGMNKGKGLZM
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