26th Jun 2014 08:04
LONDON (Alliance News) - Dart Group PLC, a package holiday operator and owner of Jet2 airline, saw its shares nosedive early Thursday, after the company posted higher profits for its last financial year but warned that profits for the current financial year will miss market expectations.
Dart shares were trading 28% lower at 180.06 pence Thursday morning, making them the worst faller on AIM.
The leisure airline and package holidays company said that in light of its summer 2014 forward bookings, it now expects current-year operating profit to be lower than previous market expectations.
"We are finding demand for leisure travel, this summer, to the markets we serve, less buoyant than we would have hoped for and market pricing weak. This may be due to the weather, the World Cup, or because the financial recovery hasn't yet taken hold in our home territory, the north of the UK," said Chairman Philip Meeson in a statement.
The profit warning for the year ahead took the shine off the group's strong profit and revenue growth in the financial year just ended.
Dart posted pretax profit of GBP42.1 million for the year ended March 31, up 4.0% on the GBP40.5 million reported a year earlier, boosted by a 29% increase in revenues to GBP1.12 billion from GBP869.2 million the prior year.
"The performance in the year reflects the continuing success of the group's leisure travel businesses," the company said.
Dart said profit and revenue growth during the year was driven by higher package holidays volumes and increased yields in both its leisure airline and package holidays businesses.
The company raised its total dividend by 47% to 2.74 pence per share, up from 1.87p the prior year.
Dart's leisure business, which trades under the brand Jet2.com, posted a 16% increase in revenues, boosted by a 14% increase in capacity, particularly to destinations such as the Mediterranean and the Canary Islands. The company said the airline will fly 229 routes to 51 destinations in 18 different countries in the current financial year, as it continues to expand its route network.
Jet2holidays, the group's package holiday brand, saw a doubling in its customer numbers and as a result posted a significant increase in revenues to GBP496.2 million, up from GBP244.8 million the prior year, as customers taking up its package holidays in the year almost doubled.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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