Dart Group flies higher as it posts jump in H1 profit and revenue

Shares in Dart Group flew higher on Thursday after the Jet2 owner posted a jump in first-half profit and revenue, although it also warned of increased losses in the second half as it continues to invest in additional aircraft, advertising and people.

In the six months to 30 September, pre-tax profit rose 30% to £212.5m on revenue of £1.7bn, up 34%. Meanwhile, the company lifted its interim dividend by 9% to 1.5p per share.

Group operating profit was up 22% to £204.9m and group profit before foreign exchange revaluation and tax rose 18% to £198.2m as Dart highlighted a strong summer season in terms of passenger volume growth for both Jet2holidays and Jet2.com, but a challenging season in terms of pricing.

Leisure Travel revenue grew 36% to £1.6bn, reflecting a 41% increase in passenger sectors flown by Jet2.com to 7.14m, which included a 41% increase in the number of Jet2holidays package holiday customers to 1.81m.

The group said that since the half year end, it has seen a further strengthening of customer demand, particularly for its flight-only product. This has resulted in future Leisure Travel bookings for this financial year performing ahead of expectations. As a result, Dart is optimistic that market expectations of group profit before foreign exchange revaluation and tax for the year ending 31 March 2018 will be materially exceeded.

However, it also warned on Thursday that increased losses are to be expected in the second half as it invests in additional aircraft, advertising and people in readiness for further flying programme expansion at all its operating bases in the summer 2018 season.

“Pleasingly, we have been encouraged by the performance of our two new operating bases and are committing additional aircraft to continue our growth at these and at our other bases for summer 2018. However, we are seeing the emergence of certain cost pressures as we continue to invest in our airport operations, colleagues and other related areas.

“Nevertheless, and despite the current uncertainty around the Brexit negotiations, we remain confident in the resilience of our leisure travel business, supported by our recent elevation to the UK's second largest package holiday operator.”

At 1045 GMT, the shares were up 9.8% to 658.50p.