Dart Group's share price has been rising steadily since it hit a low of 12.5p in early 2008 - and that trend should continue. Dart combines two quite different businesses. The dominant one is leisure airline Jet2.com, which flies out of seven northern UK airports. In the half-year to end-September 2010 it increased revenues by a quarter to £270m and was clearly the main driver behind the 50 per cent jump in underlying company profits to £38.5m. More passengers, more lucrative longer-haul flights and more revenue per passenger offset a £3m hit following flight disruptions caused by Iceland's Eyjafjallajokull volcano.
It appears that the junior logistics business, Fowler-Welch-Coolchain, performed well too, with its sales up from £57m to £70m. It distributes fresh, chilled and ambient products to supermarkets such as Tesco and Asda and will soon move into a 50,000-pallet-capacity freehold distribution centre known as 'The Hub' near Manchester. Another eye-catching number was a jump in capital spending from £6.5m to £35m. Money was spent on The Hub and a higher number of aircraft engine overhauls. But end-September cash balances were still buoyant thanks to advance customer payments of £40m.
That latter figure bodes well for the current six months. Just before the results, broker Arden forecast that 2010-11 sales will increase from £434m to £450m and that adjusted profits will be £4.1m higher at £23m.
DART (DTG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 93.5p | MARKET VALUE: | £132.5m | |
| TOUCH: | 92.75-94p | 12-MONTH HIGH: | 93.5p | LOW: 40.75p |
| DIVIDEND YIELD: | 1.2% | PE RATIO: | 6 | |
| NET ASSET VALUE: | 91p | NET CASH: | £38m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 273 | 28.1 | 14.31 | 0.36 |
| 2010 | 340 | 38.7 | 19.72 | 0.40 |
| % change | +25 | +38 | +38 | +11 |
Ex-div: 5 January Payment:28 January Aim: Airlines and airports | ||||
