A Supreme Court ruling has prompted bosses at Jet 2-owner Dart Group (DTG) to make a £17m provision in its interim accounts, distorting reported profits. On 31 October, the Supreme Court ruled that a technical defect was not "in itself an exceptional circumstance", and that Dart must therefore pay Jet 2 passengers compensation for historical flight delays.
Strip the provision out, however, and pre-tax profits actually rose by 14 per cent to £88.7m for the half year. Dart was forced to issue a profit warning when it published its full-year results back in June. But demand picked up towards the end of the summer, and winter bookings are in line with expectations. Management says the company is on track to meet analysts' full-year forecasts (adjusted to exclude the compensation provision).
Package holidays grew by more than a fifth to about 770,000, while flight-only passenger numbers rose by a more sedate 8 per cent. But ticket prices fell, with the company's net yield down 1.6 per cent year on year. That hit the operating margin, which dipped from 11.2 to 10.7 per cent for the dominant Leisure Travel division.
Analysts at Arden Partners have upgraded their forecasts. They now expect pre-tax profits of £40m, giving EPS of 21.8p, down from £49.2m and 26.4p last year.
| DART GROUP (DTG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 267p | MARKET VALUE: | £391m | |
| TOUCH: | 267-267p | 12-MONTH HIGH: | 305p | LOW: 178p |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 164p | NET CASH: | £293m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 787 | 78.1 | 41.5 | 0.60 |
| 2014 | 902 | 71.7 | 38.9 | 0.75 |
| % change | +15 | -8 | -6 | +25 |
Ex-div: 4 Jan Payment: 2 Feb | ||||
