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Dart warns on Brexit uncertainty

Shares in Dart fell 14 per cent after management warned the group may not be able to operate all routes post-Brexit.
July 12, 2017

Dart (DTG) was feeling the Brexit blues when its shares fell 14 per cent after executive chairman Philip Meeson warned  the travel company might not have the freedom to fly to all its destinations after the UK leaves the EU. Sentiment wasn't helped by a fall in pre-tax profit last year, the result of heavy investment in new operating bases at Birmingham and London Stansted airports, as well as a £10.9m foreign exchange revaluation charge. 

IC TIP: Hold at 594p

Resilient ticket prices and strong demand for leisure-based travel in the first half faded towards the end of the year, leading to heavier discounts. The average ticket price for the year fell by £4.46 to £86.65. Although this drove higher customer volumes, up to 7.1m passengers from 6.1m in the previous year, the operating profit margin fell 1.5 percentage points to 6 per cent. Its distribution and logistics business, Fowler Welch, saw revenue growth of 14 per cent to £163.5m on the back of new contract wins, but a tough market and a bad debt write-off pushed operating profit down by £0.9m to £4.5m.

Analysts at Canaccord Genuity expect pre-tax profit of £74.8m in the year to March 2018, giving EPS of 42.2p, compared with £101m and 58.8p in FY2017.

DART (DTG)    
ORD PRICE:545pMARKET VALUE:£808m
TOUCH:544-545.5p12-MONTH HIGH:665pLOW: 354.5p
DIVIDEND YIELD:1%PE RATIO:11
NET ASSET VALUE:290pNET CASH:

£331

Year to 31 MarTurnover (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20130.8740.521.71.87
20141.1242.124.72.74
20151.2540.222.43.00
20161.41104.260.24.00
20171.7390.151.85.27
% change+23-14-14+32
Ex-div:21 Sep   
Payment:27 Oct