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Dart benefits from Thomas Cook collapse

The travel group has seen an increased level of customer demand since the collapse of its larger rival
Dart benefits from Thomas Cook collapse

Dart (DTG) is proving to be a beneficiary in the aftermath of the collapse of Thomas Cook. The travel company reported increased levels of customer demand since the collapse of its larger rival in late September, with encouraging levels of later season bookings across both the flight-only Jet2 and packaged holidays Jet2holidays products. As a result, management now expects to beat current market expectations for pre-tax profit at constant currency for the year to March 2020.

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Analysts at Stifel said the improved trading should “not be totally surprising” given that around 800,000 Thomas Cook customers have cancelled bookings. These analysts expect constant-currency pre-tax profits to be up around 17 per cent to around £175m at the full year, aided by the additional seats for sunny destinations that were announced in September. Panmure Gordon analysts believe this added capacity and possible price rises will result in a 17 per cent increase in operating profit and a 20 per cent upgrade to earnings per share for FY2020.

But management also reiterated concerns stated in September about cost pressures, the value of sterling, Brexit, and consumer confidence. This could suggest a slower rate of growth for the 2021 financial year following an uptick in 2020.