Dart Group withdraws guidance amid 'rapidly changing' landscape
Dart Group updated the market on its trading after markets closed on Wednesday, in the wake of “unprecedented and unforeseen” levels of travel restrictions being imposed by governments across Europe in response to the Covid-19 coronavirus pandemic.
The AIM-traded firm said that had resulted in its Jet2 passenger airline division suspending its flying programme until at least 1 May.
It said that in the last week, it had conducted an “extensive” repatriation programme to bring its customers back to the UK.
“Given the current situation and the wide range of intangibles with which we are now faced, including concern for our hotel partners with whom we have placed deposits to secure hotel rooms for the summer 2020 season, we now have reduced visibility on the financial implications for our company,” the board said in its statement.
“In light of these rapidly changing exceptional events, plus the uncertainty around deposits recovery, the board has today decided to withdraw its previous profit guidance issued on 11 March and will provide a further update in relation to the 2020 financial year profit outturn once circumstances become clearer.”
Dart Group said the impact and duration of the pandemic was , at the current time, impossible to determine, with the board having “no clarity” as to how it would affect group profit before foreign exchange revaluation and taxation for the financial year ending 31 March 2021.
“Although we have a strong and prudent balance sheet with a £1.5bn cash balance at 18 March 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,” the directors added.
“This includes a reduced flying programme beyond 1 May, 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 firm said that while it was encouraged by the Chancellor's pledge “to do whatever it takes”, together with the announcement of a package of government-backed and guaranteed loans, it was “looking forward” to seeing further details of the proposed support for airlines and airports.
Shares in Dart Group had closed down 18.91% at 380p, before the company’s announcement.