Profits warning for Jet2 owner Dart Group
23.11.07
Dart Group, the owner of Leeds Bradford Airport based budget airline Jet2, announced a fall in first-half adjusted pretax profit and warned its underlying profitability for the year will be 'significantly reduced' from last year. Its shares dropped almost 20% on the news.
For the first half, the company's pretax profit before Specific IAS 39 mark to market adjustments declined by 39% to £12.2m from a restated £20.1m last year due to expansion at its budget airline Jet2. Pretax profit rose to £18.4m from £16m a year ago, while turnover increased to £252.9m from £198.8m.
Jet2's profitability was reduced due to its emphasis on growth rather than margin in its scheduled operations. Its capacity grew by 59% for the 2007 summer season and passenger numbers increased to 2.6m in the 6 months to September 30, from 1.7m a year earlier. Performance at the group's logistics company, Fowler Welch-Coolchain, improved. Turnover increased by 11% at margins which were slightly behind the same period last year.
The aviation and distribution company also revised its projected second-half performance on an underlying basis. It now expects this to be in line with last year, because of a combination of winter revenues being lower than previously anticipated and an increase in aircraft maintenance costs. Shares in aviation company slumped 17.6% on the news.
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