Interim Results
Dart Group PLC
18 November 2004
DART GROUP PLC
Interim Results for the Six Months Ended 30 September 2004
Dart Group PLC, the aviation services and distribution group, announces its
interim results for the six months ended 30 September 2004.
CHAIRMAN'S STATEMENT
I am pleased to report on the Group's trading for the six months ended 30
September 2004. Profit before tax and amortisation of goodwill has risen to
£11.1m (2003 - £7.4m) on turnover of £140.4m (2003 - £119.7m). It is
anticipated that the seasonal pattern of profitability seen last year will be
repeated this year as Jet2.com is profitable in the summer months and will make
a loss in the weaker winter period.
First half capital expenditure amounted to £22.8m, and primarily related to the
purchase of three Boeing 737-300 aircraft. A fourth aircraft was delivered in
October 2004. Net borrowings at 30 September 2004 were £14.4m (31 March 2004 -
£15.0m), representing gearing of 30.5% (31 March 2004 - 37%).
The Group's policy is to borrow US dollars in order to finance its US dollar
denominated Boeing 737 aircraft fleet. This provides a natural balance sheet
hedge as assets are largely equal and opposite to liabilities. At 30 September
2004 US dollar assets and liabilities amounted to US$ 130.9m. This structure
has also contributed to the net interest receivable in the profit and loss
account as the Group has been able to deposit sterling at higher rates of
interest than its US dollar borrowing costs.
All known fuel requirements for Jet2.com have been hedged for the rest of this
financial year together with a significant proportion of the current forecast
requirements for 2005/6, at average rates lower than the current market price.
Neither the Aviation Services Division's contract charter operations nor the
Distribution Division currently has any material exposure to oil price risk, as
this is substantially covered in fuel escalation clauses in our commercial
contracts.
The Board is pleased to declare an interim dividend of 2.04p per share (2003 -
1.85p), an increase of 10.3%. The dividend will be paid on 6 January 2005 to
shareholders on the register as at 26 November 2004.
Aviation Services
The Aviation Services Division comprises Channel Express (Air Services) and
Benair Freight International, the Group's freight forwarder. Channel Express
operates contract charter passenger and freight air services and, trading as
Jet2.com, scheduled low cost services from the North of England and Northern
Ireland.
The company's aircraft fleet consists of Airbus A300B4 Eurofreighters and Boeing
737-300 passenger and Quick Change aircraft. The final three Fokker F27
freighters will be withdrawn from service in January 2005. The Eurofreighters
are contracted to leading express parcel companies and operate night freight
services into their European hubs.
The Boeing 737-300 Quick Change aircraft fly night freight services for Royal
Mail, after which they are quickly changed back into passenger configuration for
daytime operations. We have experienced a stronger than expected demand for
these aircraft from our passenger charter customers which has contributed to the
improved results.
The company's Jet2.com scheduled low cost services have also experienced higher
than expected demand at its Leeds Bradford and Belfast International Airport
bases. Over half a million passengers were flown between the UK and city break
and Mediterranean sun destinations during the six months to 30 September 2004.
Capacity at Leeds Bradford and Belfast International Airports is being increased
for the summer of 2005 in order to serve more destinations with greater
frequency.
On 29 September we announced a third base, at Manchester Airport, where
initially six aircraft will serve at least ten European destinations by May
2005. Additionally, a three times daily low cost Manchester - London Gatwick
service will commence on 17 January 2005. We expect to continue to develop
Jet2.com services in the North, providing our customers with a friendly and
efficient low cost service.
It is very pleasing to be able to report Benair Freight International's
continued success. Profitable growth has been sustained in both its core
freight operations and specialist ornamental fish importing business. This is a
reflection of the competitive and customer focused service the company offers.
Distribution
Fowler Welch-Coolchain, the Group's temperature-controlled distributor of fresh
produce, horticulture and food products, primarily on behalf of supermarkets and
their suppliers, trades in a challenging market. Pricing is always under
pressure whilst service levels must remain high. However, the company is
organised to deliver excellent transportation services at competitive rates and
is continually seeking new business for both its UK and European operations.
The trend for supermarkets to source direct from overseas producers is helping
the division's European business and relationships are being formed with
continental hauliers to meet this demand cost-effectively.
To bring further efficiencies, the division's businesses continue to be
streamlined and costs reduced, lowering the fixed cost base. Incremental
volumes, which our enthusiastic distribution team wins, directly enhance the
division's profitability. Fowler Welch-Coolchain has recently won additional
business that requires storage and picking services prior to onward
distribution. We are currently competing for further opportunities of this
nature. There is considerable optimism for the future profitable growth of our
distribution business.
Outlook
Each of the markets in which the Group trades is, of course, extremely
competitive. However, I believe that shareholders will be encouraged by our
anticipated full year financial performance.
Philip Meeson,
Chairman 18 November 2004
www.dartgroup.co.uk
Enquiries: Philip Meeson, Chairman
Tel: 01202 597676 Mobile: 07785 258666
Mike Forder, Group Finance Director
Tel: 01202 597676 Mobile: 07721 865850
UNAUDITED INTERIM CONSOLIDATED RESULTS
for the half year to 30 September 2004
Half year to Half year to Year to
30 September 30 September 31 March
2004 2003 2004
(unaudited) (unaudited) (audited)
Note £'000 £'000 £'000
Turnover - continuing operations 1 140,381 119,661 228,200
Net operating expenses,
excluding amortisation of goodwill (129,365) (112,496) (219,195)
Amortisation of goodwill (248) (248) (497)
Net operating expenses (129,613) (112,744) (219,692)
Operating profit - continuing operations 10,768 6,917 8,508
Profit on disposal of fixed assets 40 446 365
Net interest receivable/(payable) 2 60 (237) (353)
Profit on ordinary activities before taxation 10,868 7,126 8,520
Taxation (3,535) (2,368) (2,868)
Profit on ordinary activities after taxation 7,333 4,758 5,652
Dividends (701) (636) (2,099)
Retained profit for the period 3 6,632 4,122 3,553
Earnings per share
- basic 21.34p 13.86p 16.46p
- basic, excluding the amortisation of goodwill 22.06p 14.58p 17.91p
- diluted 21.27p 13.83p 16.43p
Dividend per share
2.04p 1.85p 6.11p
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Half year to Half year to Year to
30 September 30 September 31 March
2004 2003 2004
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Profit on ordinary activities after taxation
7,333 4,758 5,652
Foreign exchange movement on foreign equity investments 19 (13) (63)
Total gains and losses recognised in the period 7,352 4,745 5,589
CONSOLIDATED BALANCE SHEET
at 30 September 2004
30 September 31 March
2004 2004
(unaudited) (audited)
Note £'000 £'000
Fixed assets
Intangible assets 7,532 7,780
Tangible assets 86,353 75,264
93,885 83,044
Current assets
Stock 1,648 2,216
Debtors 34,118 31,221
Cash at bank and in hand 18,409 13,362
54,175 46,799
Current liabilities
Creditors: amounts falling due
within one year (61,131) (55,793)
Net current liabilities (6,956) (8,994)
Total assets less current liabilities 86,929 74,050
Creditors: amounts falling due after more than one year (29,554) (25,093)
Provision for liabilities and charges (10,055) (8,293)
(39,609) (33,386)
Net assets 47,320 40,664
Capital and reserves
Called up share capital 1,718 1,718
Share premium account 7,707 7,702
Profit and loss account 3 37,895 31,244
Shareholders' funds - equity interests
47,320 40,664
CONSOLIDATED CASH FLOW STATEMENT
for the half year to 30 September 2004
Half year to Half year to Year to
30 September 30 September 31 March
2004 2003 2004
(unaudited) (unaudited) (audited)
Note £'000 £'000 £'000
Net cash inflow from operating activities 4 24,369 19,939 36,111
Returns on investment and servicing of finance
Interest paid: bank and other loans (282) (333) (853)
Interest received: bank 292 96 302
10 (237) (551)
Taxation
Corporation and overseas tax paid (479) (1,462) (506)
Capital expenditure and financial investment
Purchase of tangible fixed assets (22,812) (19,008) (28,156)
Disposal of tangible fixed assets 1,885 453 2,137
(20,927) (18,555) (26,019)
Equity dividends paid (1,464) (1,463) (2,099)
Cash inflow/(outflow) before financing 1,509 (1,778) 6,936
Financing
Ordinary share capital issued 5 15 30
Other loans repaid (4,794) (5,777) (18,553)
Other loans advanced 8,842 12,941 16,052
4,053 7,179 (2,471)
Increase in cash in the period 5 5,562 5,401 4,465
NOTES TO THE INTERIM RESULTS
at 30 September 2004
1. Turnover
Half year to Half year to Year to
30 September 30 September 31 March
2004 2003 2004
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Distribution 51,048 58,005 112,076
Aviation Services 89,333 61,656 116,124
140,381 119,661 228,200
Turnover arising within:
The United Kingdom and the Channel Islands 137,091 116,374 222,804
Mainland Europe 2,777 2,753 4,368
The Far East 513 534 1,028
140,381 119,661 228,200
Analyses of profit before taxation and net assets between the
different segments of the Group are not given as, in the opinion of the
directors, such analyses would be seriously prejudicial to the commercial
interests of the Group.
2. Net interest receivable/(payable)
Half year to Half year to Year to
30 September 30 September 31 March
2004 2003 2004
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
On bank loans and overdrafts (50) (178) (21)
On other loans (232) (265) (835)
Other interest payable - - (5)
(282) (443) (861)
Interest receivable 292 96 303
10 (347) (558)
Interest capitalised within tangible fixed assets 50 110 205
60 (237) (353)
3. Profit and loss account reserve
Half year to Half year to Year to
30 September 30 September 31 March
2004 2003 2004
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Balance at the beginning of the period 31,244 27,754 27,754
Retained profit for the period 6,632 4,122 3,553
Currency translation differences 19 (13) (63)
37,895 31,863 31,244
NOTES TO THE INTERIM RESULTS
at 30 September 2004
4. Reconciliation of operating profit to net cash flow from
operating activities
Half year to Half year to Year to
30 September 30 September 31 March
2004 2003 2004
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Operating profit 10,768 6,917 8,508
Depreciation 10,861 13,033 18,759
Amortisation of goodwill 248 248 497
Decrease in stock 568 153 236
(Increase) in debtors (2,897) (2,265) (309)
Increase in creditors 4,802 1,866 8,480
Exchange differences 19 (13) (60)
24,369 19,939 36,111
5. Reconciliation of net cash flow to movement in net debt
Half year to Half year to Year to
30 September 30 September 31 March
2004 2003 2004
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Increase in cash in the period 5,562 5,401 4,465
Cash (inflow)/outflow from (increase)/decrease in net
debt in the period (4,048) (7,164) 2,501
Change in net debt resulting from cashflows
in the period 1,514 (1,763) 6,966
Exchange differences (933) 1,467 6,196
Net debt at 1 April (15,032) (28,167) (28,167)
Net debt at end of period (14,451) (28,463) (15,032)
6. Other matters
The financial information for the year to 31 March 2004 does not
constitute statutory accounts, as defined in Section 240 of the Companies Act
1985, but is based on the statutory accounts for the year then ended. Those
accounts, upon which the auditors issued an unqualified opinion, have been
delivered to the Registrar of Companies.
The accounts to 30 September 2004 have been prepared using accounting
policies consistent with those adopted for the year to 31 March 2004.
Basic earnings per share has been calculated by reference to earnings
of £7,333,000 (2003: £4,758,000) and a weighted average number of ordinary
shares in issue of 34,358,217 (2003: 34,340,047).
This report is being sent to all shareholders and copies are available
from the Company Secretary at the registered office of the Company, Building
470, Bournemouth International Airport, Christchurch, Dorset, BH23 6SE.
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