2007/082006/072005/062004/052003/042002/03Key Documents

Dart Group PLC Company Reports

Chairman's Statement

I am pleased to report on the Group’s continuing positive trading performance for the year ended 31 March 2019. 

Profit before taxation which includes a £2.6m loss for foreign exchange revaluations (2018: £20.0m gain) increased by 36% to £177.5m (2018: £130.2m). Before accounting for these revaluation losses, profit before FX revaluations and taxation increased by 63% to £180.1m (2018: £110.2m). Basic earnings per share increased by 36% to 97.98p (2018: 72.16p).

In consideration of these results, the Board is recommending an increased final dividend of 7.4p per share (2018: 6.0p), which will bring the total proposed dividend to 10.2p per share for the year (2018: 7.5p), an increase of 36%. This final dividend is subject to shareholders’ approval at the Company’s Annual General Meeting on 5 September 2019 and will be payable on 25 October 2019 to shareholders on the register at the close of business on 20 September 2019.

Our performance reflects the growing success of our Leisure Travel products - holiday flights with our award-winning airline Jet2.com and package holidays with our acclaimed ATOL (*) licensed tour operator Jet2holidays – which has led to continuing strong customer demand for both. 

During the year, Jet2.com flew a total of 12.82m flight-only and package holiday passengers (one-way passenger sectors) (2018: 10.38m), with our flight-only product enjoyed by 6.49m passengers, a growth of 21%. Demand for our Real Package Holidays™ continued to grow, as Jet2holidays took 3.17m customers on package holidays (2018: 2.50m), an increase of 27%.

We are an integrated leisure travel provider and this Summer we will have 100 aircraft in our fleet and are fully in control of our seat supply. Together with our customer volumes, this allows us to optimise load factors which are consistently above 90% and to serve many destinations daily and others several times a week during the Spring, Summer and Autumn months, offering a great choice of variable duration holidays at affordable prices, and to deliver the flexibility that today’s holidaymakers require.

Our Distribution & Logistics business, Fowler Welch’s ethos of ‘Listening, Responding and Delivering’ to customers’ needs again proved successful, as it continued to attract new business from both existing and new customers. Additional distribution contracts have also commenced early in the current financial year. 

We are proud and pleased that the financial year ended 31 March 2019 saw the start of the Group’s Discretionary Colleague Profit Share Scheme, to reward those colleagues who do not already participate in performance related bonus or commission schemes and who have been continuously employed for at least 12 months. The first payments totalling £9.5m (including employer’s NI, £10.8m) were made at the end of July 2019 - we are thrilled to be sharing our success with our fantastic colleagues!

We wouldn’t be where we are without the talent and dedication of our 11,000+ colleagues and one of my greatest pleasures as Executive Chairman is working with and getting to know so many enthusiastic and dedicated people throughout our business. Their commitment to delight the customer is hugely appreciated and is what drives our continued success. Therefore, I’d like to thank everyone for another year of determined effort which has delivered such great progress and financial results.

Leisure Travel 

We take people on holiday! Our UK Leisure Travel business specialises in the provision of scheduled holiday flights by our award-winning leisure airline, Jet2.com, and ATOL licensed package holidays by our acclaimed tour operator, Jet2holidays, to destinations in the Mediterranean, the Canary Islands and to European Leisure Cities.

We know that taking a holiday is one of the most important family experiences of the year. We therefore do our very best to ensure that each of our customers “has a lovely holiday” that can be both eagerly anticipated and fondly remembered, supported by our core principles of being family friendly, offering value for money and giving great customer service.  

Putting the customer first is what has driven Jet2’s success and the delivery of great service is at the core of Jet2.com and Jet2holidays brand values. We recognise that, whether taking a holiday flight with Jet2.com, or end-to-end Real Package Holidays™ with Jet2holidays, the delivery of an attractive and memorable holiday experience engenders loyalty and repeat bookings. The combined power of our proposition, product, people and purpose is what will fuel our ongoing success, as we constantly seek to improve our customers’ holiday choice, experience and enjoyment, giving us the greatest opportunity to retain and attract new customers – the key to continuing profitable growth! 

We continually review and refresh our product offerings, whilst carefully expanding our resorts presence - our hotel portfolio now numbers over 4,000 for Summer 2019 (Summer 2018: over 3,400 hotels). We often place substantial deposits to secure dependable and competitive room offerings in the most attractive properties, always ensuring that we are satisfying our customers’ desire for choice and quality. Encompassing a wide range of great value 2 to 5-star accommodation, catering for the young, not so young and families alike, many have adjacent waterparks and other great attractions included in the package, adding enjoyment and interest to the overall holiday experience. Over 40% of our package holidays were sold on an all-inclusive basis offering a ‘Defined Price’ for the whole holiday experience, including flights, transfers, meals, drinks for the adults and ice lollies for the kids! This is a particularly resilient, great value offering for families managing to a tight budget and is particularly attractive in these times of economic uncertainty.

Innovation helps to make sure we are truly reflecting diversity in our product range and allows us to meet our customers’ developing expectations:

  •  Our market leading Resort Flight Check-In® service, which allows Jet2holidays’ customers to check-in their bags at their hotel and to enjoy their final day, bag and hassle free before going to the airport for their flight home, has proved to be an attractive and valued service engendering great customer feedback. As a result, we have expanded the service to over 280 hotels for Summer 2019 (Summer 2018: over 250 hotels) in 44 key holiday resorts. 
  •  Jet2Villas, our ATOL protected Jet2.com flight + car + villa package which launched in June 2017, has also proven very popular and now offers an increased range of over 2,000 self-catering villas, many with a private pool, in more than 35 European beach destinations, all secured with just a £60 per person deposit!   
  •  Jet2CityBreaks, which offers a packaged flight + hotel in attractive European Leisure Cities continues to grow profitably at an encouraging rate; and  
  •  Our Indulgent Escapes brand of hand-picked 5-star hotels for those who perhaps want more luxury and refinement, goes from strength to strength. 

And, to ensure that each of our customers has a pleasant holiday experience, in Summer 2019 we will employ nearly 700 in-resort customer helpers, backed up by 24-hour customer helplines, to give practical assistance in all eventualities. Together with convenient airport-to-hotel transfer services, everything is organised to make our customers' holidays easy and carefree.

Real Package Holidays™ are not easily replicated by non-specialists and take considerable organisation and attention to detail. To ensure this is as comprehensive as possible, Jet2holidays employs over 1,000 colleagues developing product, contracting and administering hotels, managing the finances and providing operational support.

In Summer 2018, Jet2.com flew 90 aircraft (Summer 2017: 75) from our nine UK bases. We were very proud to be recognised in the Top 10 Airlines of the World and as both Best Airline - UK and Best Airline - Europe at the TripAdvisor Travellers' Choice Awards 2019. In addition, we were once again the Top UK Airline for punctuality of flights running on time over the previous 12 months, as measured by the world’s leading travel intelligence company, OAG.

We have continued to develop our customer-focused flying programme into Summer 2019 when the aircraft fleet increases to 100, with a commensurate increase in pilots, engineers and cabin crew. To ensure we have well trained colleagues to support our continued growth, our Flight Simulator and Training Centre in Bradford has recently taken delivery of a fifth flight simulator.

We are keen to create the right environment for all our colleagues to thrive and are committed to delivering a balanced lifestyle. To achieve this, for our aircraft crews we have launched our “Lifestyle 2020” programme, which is being implemented through 2019 and 2020. The substantial financial investment that this programme requires highlights our commitment to be a career airline of choice for all.

Our long-term ambition remains the same - To be the Leading UK Leisure Travel Business. Jet2holidays has consolidated its position as the UK’s second largest ATOL licensed package holidays operator, however there is always more we can do as we learn, evolve and grow. Our business model is unchanged - we continue to focus on delivering wonderful holiday experiences with priceless memories, ensuring that the customer remains at the centre of everything we do. Whilst our flight-only product remains very important, we believe our package holiday business continues to have increasing potential. We are fully focused on expanding this offering with its inherent higher margin and are encouraged that sales continue to grow, outstripping the market, as our reputation for providing ‘package holidays you can trust’™ strengthens. This gives us every confidence that we continue to have a bright future in the Leisure Travel marketplace.

(*) ATOL, which is managed by the UK Civil Aviation Authority (‘CAA’), is a statutory licensing scheme which also provides financial protection to consumers of licensable air travel. As a licensing scheme it ensures that only businesses regarded as financially robust and fit can sell licensable travel, and as a financial protection scheme, it ensures that if an ATOL holder fails, affected consumers are able to complete their holiday and be repatriated or, if they cannot get away, receive a full refund.

Distribution & Logistics 

Fowler Welch is one of the UK’s leading providers of food supply-chain distribution & logistics, serving retailers, processors, growers and importers. A full range of value-added services is provided, including chilled & ambient storage, case-level picking, the packing of fruits and our award-winning national distribution network.

The business operates from nine prime UK distribution sites, with major temperature-controlled operations in the key produce growing and importing areas of Spalding in Lincolnshire; Teynham and Paddock Wood in Kent; and Hilsea near Portsmouth.

Further regional distribution sites are located at Nuneaton near Coventry; Washington, Tyne and Wear; and at Newton Abbott, Devon. Ambient (non-temperature-controlled) consolidation and distribution services are located at Heywood near Bury, Greater Manchester; and Desborough, Northamptonshire.

In addition, Integrated Service Solutions (ISS), Fowler Welch’s joint venture fruit ripening and packing business at Teynham, completed its fifth year of successful trading and once again contributed verypositively towards overall Group profitability. ISS packs in excess of 50 different fruit types which are imported by its customers from over 65 countries. The company’s strong service delivery has resulted in it winning additional fruits and salads volume over the last year and together with the management team’s focus on automation and technology, operating and financial performance continues to improve year-on-year.

The Fowler Welch team constantly strive to add value for our customers. The receipt of the Temperature Controlled Storage & Distribution Partnership Award 2018, reflects our ability to tailor supply chain solutions to a specific need, whilst the provision of innovative solutions to many customers was recognised at the Footprint Awards 2019, where Fowler Welch was awarded the Environmentally Efficient Logistics Award.

By continually developing its revenue pipeline and delivering value adding, innovative supply chain services, supported by a strong operational reputation, we believe the outlook for Fowler Welch continues to be very positive.

Outlook    

Both our Leisure Travel and Distribution & Logistics businesses have made satisfactory starts to the new financial year.

Though overall demand for our leisure travel products has continued to strengthen since the start of the new financial year, it is clear from our forward booking trends that generally, less confident consumers are booking later than last year and therefore pricing for both our flight-only and package holiday products has to be continually enticing. Nevertheless, with still some way to go in the booking cycle, the Board remains optimistic that current market expectations for Group profit before foreign exchange revaluations and taxation for the year ending 31 March 2020 will be met.

Looking further ahead, the Travel Industry in general is facing cost pressures in relation to fuel, carbon and other operating charges which, together with the necessary continued investment in our own products and operations, including that required to attract and retain colleagues, are headwinds that the business faces. However, in the long term we are confident of the resilience of both our Leisure Travel and Distribution & Logistics businesses.

The Group particularly dedicates significant resources to deliver Real Package Holidays™ and we believe we have the strategy to grow our flight-only and package holiday businesses, with the products, the people and the proposition to go from strength to strength. With our Customer focused approach, we are confident that our customers will continue to be keen to travel with us from our Rainy Island to the sun spots of the Mediterranean, the Canary Islands and to European Leisure Cities.

Philip Meeson
Executive Chairman

29 July 2019