Arden Partners upgraded forecasts just last month. Now, Arden analyst Chris Thomas has raised forecasts for adjusted pre-tax profit by another 9 per cent to £35m, giving adjusted EPS of 18.6p (from £28.1m and 16p for 2012). Yet he still admits these could be conservative. Twice as many passengers booked their break with package holiday business Jet2holidays, mostly popular all-inclusive deals, than last year. Each of the 312,000 holidaymakers paid around 10 per cent more than last year for the privilege, too, swelling revenue by almost £100m. That inevitably meant more passengers for Dart's Jet2.com airline. It flew 3.6m passengers in the six months, increased revenue by 23 per cent to £388m and managed to push profit margins higher - despite operating costs increasing by a fifth.
A big increase in forward bookings for both this winter and next summer helped boost the net cash pile by £98.2m year on year. True, the business is becoming more seasonal - bad news for the second half - but Dart is running extra flights to the Canary Islands through the winter and capacity for next summer will increase by another 11 per cent.
| DART (DTG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 111p | MARKET VALUE: | £159.2m | |
| TOUCH: | 110-112p | 12-MONTH HIGH: | 122p | Low: 57p |
| DIVIDEND YIELD: | 1.3% | PE RATIO: | 5 | |
| NET ASSET VALUE: | 132p | NET CASH: | £191.9m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 446 | 41.6 | 21.8 | 0.43 |
| 2012 | 585 | 57.0 | 30.1 | 0.54 |
| % change | +31 | +37 | +38 | +26 |
|
Ex-div: 24 Dec Payment: 01 Feb |
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IC VIEW
Despite rising nearly 60 per cent since late August, Dart's shares trade on just six times forecast earnings - an unfair discount to larger rivals, given its strong cash generation and potential for further growth. They trade below net assets, too. Buy.
Last IC view: Buy, 69p, 22 Jun 2012
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