18th Mar 2020 17:52
(Alliance News) - Dart Group PLC on Wednesday withdrew its previously announced positive profit guidance for financial 2020 as the Jet2holidays operator fell victim to the coronavirus pandemic.
Earlier this month, Dart said it expected its full-year profit for the current financial year to be "significantly ahead" of market forecasts, but warned "momentum has weakened" due to the spread of the coronavirus.
However, as the situation became more severe, Dart's Jet2 planes from the UK to Spain were turned back in mid-air last week. The airline subsequently announced it was cancelling all flights to the country due to the coronavirus outbreak and Jet2.com suspended its flying programme until at least May 1.
Dart said Wednesday, that in light of the devastation the coronavirus spread has had on the global travel industry, it has decided to withdraw its previous profit guidance and will provide a further update for financial 2020 once circumstances become clearer.
"Although we have a strong and prudent balance sheet with a GBP1.5 billion cash balance at March 18, 2020, and long-term structured debt in relation to aircraft financing, given the escalating situation we have accelerated actions to underpin the stability of our business and improve cash flows. This includes a reduced flying programme beyond May 2020, freezing recruitment and discretionary spending and deferring all non-regulatory capital expenditure. In addition, we are in ongoing discussions with existing liquidity providers who recognise the strength of our business model," the company said.
The stock closed down 18% at 380.01 pence on Wednesday.
By Arvind Bhunjun; [email protected]
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