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RNS
Dart Group PLC   -  DTG   

Final Results

Released 07:00 11-Jul-2019

RNS Number : 1342F
Dart Group PLC
11 July 2019
 

DART GROUP PLC

 

PRELIMINARY UNAUDITED RESULTS FOR YEAR ENDED 31 MARCH 2019

 

Dart Group plc, the Leisure Travel and Distribution & Logistics group ("the Group"), announces its preliminary results for the year ended 31 March 2019. These results are presented under International Financial Reporting Standards ("IFRS"), as adopted by the EU.

 

Group Financial Highlights

For the year ended 31 March

Unaudited

2019

Restated 2

2018

 

Change

Revenue

£3,143.1m

£2,380.0m

32%

Operating profit

£203.4m

£126.2m

 61%

Operating profit margin

6.5%

5.3%

1.2 ppts

Profit before FX revaluation and taxation 1

£180.1m

£110.2m

63%

Profit before FX revaluation and taxation margin

5.7%

4.6%

1.1 ppts

Profit before taxation

£177.5m

£130.2m

36%

Profit before taxation margin

5.6%

5.5%

0.1 ppts

Basic earnings per share

97.98p

72.16 p

 36%

Proposed final dividend per share

7.4p

6.0p

 23%

Resulting total dividend per share

10.2p

7.5p

36%

[1] Profit before FX revaluation and taxation is included as an alternative performance measure in order to aid users in understanding the ongoing performance of the Group. Further information can be found in Note 8.

[2] Figures shown for the year ended 31 March 2018 have been restated to reflect the adoption of IFRS 15 in the current year. Further information can be found in Note 7.

*   Profit before taxation improved by 36% to £177.5m (2018: £130.2m). This result includes a £2.6m loss on foreign exchange revaluations (2018: £20.0m gain). Before accounting for this revaluation loss, profit before FX revaluation and taxation improved by 63% to £180.1m (2018: £110.2m).

*    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 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%.

*    Operating losses for the second half of the year increased, as we continued to invest in additional aircraft and marketing, together with the increasing cost of retaining and attracting colleagues in readiness for our expanding Summer 2019 flying programme.

*    Distribution & Logistics profit before tax decreased by £0.1m to £4.3m (2018: £4.4m) on improved revenues of £178.7m (2018: £168.6m), as it continued to attract new business from both existing and new customers.

*    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%.

*    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.

 

 

OUR 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) will be 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 as 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 & 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 very positively towards overall Group profitability. ISS packs in excess of fifty different fruit types which are imported by its customers from over sixty-five 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

 

11 July 2019

 

BUSINESS & FINANCIAL REVIEW

 

The Group's financial performance for the year ended 31 March 2019 is reported in line with International Financial Reporting Standards ("IFRS"), as adopted by the EU.

 

Summary Income Statement

Unaudited

 Restated



2019

2018



£m

£m

Change

Revenue

3,143.1

2,380.0

32%

Net operating expenses

(2,939.7)

(2,253.8)

(30%)

Operating profit

203.4

126.2

61%

Net financing expense (excluding net FX revaluation)

(25.6)

(16.3)

(57%)

Profit on disposal of property, plant and equipment

2.3

0.3


Profit before FX revaluation and taxation

180.1

110.2

63%

Net FX revaluation (losses) / gains

(2.6)

20.0


Profit before taxation

177.5

130.2

36%





Net financing expense / (income)

28.2

(3.7)


Depreciation

131.5

111.6

18%

EBITDA*

337.2

238.1

42%





Operating profit margin

6.5%

5.3%

1.2 ppts

Profit before FX revaluation and taxation margin

5.7%

4.6%

1.1 ppts

Profit before taxation margin

5.6%

5.5%

0.1 ppts

EBITDA margin 

10.7%

10.0%

0.7 ppts

* EBITDA is included as an alternative performance measure in order to aid users in understanding the underlying operating performance of the Group and growth in profitability of the operations. Further information can be found in Note 7.

 

Summer 2018 proved to be a particularly strong season for our Leisure Travel business, as demand for both our flight-only offering from Jet2.com and our higher margin package holiday product from Jet2holidays, proved buoyant throughout. However, the favourable trading conditions gave way to a more uncertain consumer environment in the second half of the year, which led to increased levels of price discounting to achieve the planned growth in customer volumes. Overall, Leisure Travel revenue increased by 34% to £2,964.4m (2018: £2,211.4m), and together with a 6% increase in Distribution & Logistics revenue to £178.7m (2018: £168.6m), Group revenue increased by 32% to £3,143.1m (2018: £2,380.0m).

 

Operating losses for the second half of the year increased, as we continued to invest in additional aircraft and marketing, together with the increasing cost of retaining and attracting colleagues in readiness for our expanding Summer 2019 flying programme. Notwithstanding these increased losses, overall Group operating profit for the year increased by 61% to £203.4m (2018: £126.2m). 

 

Net financing expense of £25.6m (2018: £16.3m) is stated after the receipt of bank interest of £10.7m (2018: £4.8m) and after interest payable on loans and finance leases of £36.3m (2018:  £21.1m), predominantly in relation to borrowings drawn to fund the acquisition of the Group's new Boeing 737-800NG aircraft deliveries. In addition, net FX revaluation losses of £2.6m (2018: £20.0m net gain) were incurred, arising from the revaluation of foreign currency denominated monetary balances.

 

As a result, the Group achieved a statutory profit before taxation for the year of £177.5m (2018: £130.2m). Group EBITDA increased by 42% to £337.2m (2018: £238.1m). The Group's effective tax rate of 18% (2018: 18%) was marginally lower than the 19% headline rate of corporation tax due to the recognition of deferred tax at 17%. Basic earnings per share increased by 36% to 97.98p (2018: 72.16p).

 

 Summary of Cash Flows

Unaudited

 Restated



2019

2018



£m

£m

 Change

EBITDA

337.2

238.1

42%

Other P&L adjustments

(1.9)

0.1


Movements in working capital

135.0

189.0

(29%)

Interest and taxes

(29.4)

(12.3)

(139%)

Net cash generated from operating activities

440.9

414.9

6%

Purchase of property, plant and equipment

(302.3)

(411.1)

26%

Movement on borrowings

131.6

329.4

(60%)

Other items

(4.5)

(13.6)

67%

Net increase in cash and money market deposits (a)

265.7

319.6

(17%)

(a)    Cash flows are reported including the movement on money market deposits (cash deposits with maturity of more than three months from point of placement) to give readers an understanding of total cash generation. The Consolidated Cash Flow Statement reports net cash flow excluding these movements.

 

The Group generated increased net cash flow from operating activities of £440.9m (2018: £414.9m), driven by the Leisure Travel business trading performance. Total capital expenditure incurred of £302.3m (2018: £411.1m) included the purchase of both new and used Boeing 737-800NG aircraft, continued investment in the long-term maintenance of our existing aircraft fleet and the purchase of a fifth flight simulator for our training centre in Bradford. Investment in technology and various infrastructure projects across the Group were also undertaken, which included extending the footprint at Holiday House, our commercial centre in central Leeds, to fully occupy this seven-floor building and a replacement roof for Fowler Welch's Heywood depot.

 

New loans totalling £228.3m (2018: £458.2m) were drawn down, as the Group secured both commercial debt and on balance sheet finance lease funding for the purchase of its new Boeing aircraft deliveries, offset by £96.7m (2018: £128.8m) of aircraft loan repayments. Overall, this resulted in a net cash inflow of £265.7m (2018: £319.6m) and an improved year-end gross cash position, including money market deposits, of £1,274.3m (2018: £1,008.6m). Net cash, stated after borrowings of £983.1m (2018: £806.6m), was £291.2m (2018: £202.0m).

 

At the reporting date, the Group had received payments in advance of travel from its Leisure Travel customers amounting to £905.9m (2018: £777.9m), had no cash restricted by its merchant acquirers and had no cash placed with counterparties in the form of margin calls to cover out-of-the-money hedge instruments (2018: £nil). The Group continues to comfortably exceed the UK Civil Aviation Authority's 'liquidity threshold test'.

 

 

Summary Balance Sheet

Unaudited

Restated



2019

2018



£m

£m

Change

Non-current assets (b)

1,292.5

1,089.8

19%

Net current assets (c)

58.1

58.4

(1%)

Cash and money market deposits

1,274.3

1,008.6

26%

Deferred revenue

(939.9)

(807.3)

(16%)

Borrowings

(983.1)

(806.6)

(22%)

Deferred taxation

(84.1)

(68.2)

(23%)

Derivative financial instruments

(22.4)

39.1

(157%)

Total shareholders' equity

595.4

513.8

16%

(b)    Stated excluding derivative financial instruments.

(c)    Stated excluding cash and cash equivalents, money market deposits, deferred revenue, borrowings and derivative financial instruments.

 

Total shareholders' equity increased by £81.6m (2018: £93.9m) which primarily comprised profit after taxation of £145.6m (2018: £107.1m) and an adverse (2018: adverse) movement in the cash flow hedging reserve. This movement was primarily a result of in-the-money jet fuel forward contracts held at the end of the previous financial year which matured during the year.

 

Segmental Performance - Leisure Travel

 

The growing awareness and appreciation of our leisure travel products resulted in an overall 24% increase in passenger sectors flown to 12.82m (2018: 10.38m). Passengers choosing our important flight-only product increased by 21% to 6.49m (2018: 5.37m), whilst customers choosing our higher margin package holiday product increased by 27% to 3.17m (2018: 2.50m). Package holiday customers now represent 49% of overall flown customers (2018: 48%). Our two newest operating bases at Birmingham and London Stansted are proving popular in just their second year of operation, with many passengers having chosen Real Package Holidays with Jet2holidays.

 

Average flight-only ticket yield per passenger sector at £81.79 (2018: £73.01) was 12% higher compared to the challenging market experienced in the prior year, with average load factors increasing to 92.8% (2018: 92.2%) against a 23% increase in seat capacity.

 

The increasing mix of Package Holiday customers is pleasing, as the longer duration, end-to-end holiday experience allows greater value to be added through product innovation and service at each point in the customer's journey. This proposition lends itself to brand loyalty and retention and a better quality of recurring revenue and profitability, compared to the more impulsive, price-sensitive, shorter duration, flight-only product.

The percentage of overall package holiday customers taking shorter duration package holidays increased by 2 percentage points during the year, whilst the percentage taking all-inclusive holidays and higher value 4 and 5-star packages has remained broadly consistent. The cost of acquiring hotel rooms increased primarily because of the stronger Euro and as a result the overall average price of a package holiday increased to £669 (2018: £633).

 

Non-ticket retail revenue per passenger grew by 7% to £24.07 (2018: £22.52). This revenue stream, which is primarily discretionary in nature, continues to be optimised through our customer contact programme as we focus on continually developing our customer services.

 

Overall, revenue in our Leisure Travel business grew by 34% to £2,964.4m (2018: £2,211.4m) at an operating profit margin of 6.7% (2018: 5.5%), resulting in operating profit growth of 63% to £199.1m (2018: £121.8m).

 

We recognise that investing for the long-term success of the business is essential to stay ahead. For many families, booking a holiday is the most important purchase of the year and we know that in an increasingly crowded market, it is vital that customers are constantly made aware of our brand and product proposition to consider us when making a booking. We therefore commit significant marketing investment to ensure our brand building share of voice is imaginative and strong, whether that be through traditional media such as TV, radio, newspapers or outdoor advertising, or via social media channels, video on demand or influencers. 

 

The delivery of a friction-free experience at every stage of the customer booking journey is of paramount importance, whichever booking channel is chosen. Over 60% of our package holidays are sold online via Jet2holidays.com, whilst 91% of our flight-only seats are booked directly on the Jet2.com website. We know that our websites and mobile applications must work for everyone, as customers' online browsing and purchasing habits perpetually evolve - our shop window is whatever screen a customer is looking at and we want everyone to be able to find and book our holiday flights and package holidays quickly and easily. Investment in, and development of, digital strategy is therefore integral to the Leisure Travel business and we commit considerable monies to ensure that the search and booking experience is as effortless and efficient as possible, whether the customer uses a PC, tablet or mobile phone.

 

Additionally, we continue to build on the strong foundation of our existing Customer Relationship Management programme and to invest in our data science and analytics capability to improve our recommendations algorithms. Over time this will deliver even more personalised communications and content to customers to strengthen our already strong relationships with them.

 

We also recognise that personal interaction is important for many customers when making such an important purchase. Our customer contact centres in Leeds, Manchester and Palma, Majorca, employ over 350 sales and customer service advisers to ensure customers' individual needs are catered for. Currently 15% (or approximately 480,000) of our package holiday customers book through this channel. In addition, approximately a quarter of our package holiday sales are booked through independent travel agents, who are considered very valuable and important distribution partners for our business. 

 

Brand awareness continues to improve as a result of our broad marketing strategy and attention to customer service, with increasing repeat bookings from customers satisfied by the overall product experience. With our sparkling net promoter scores and Jet2.com Jet2holidays having recently been awarded Which? Recommended Provider status, it's a clear endorsement of the VIP experience we offer, and why we believe the Leisure Travel business remains well-placed to deliver successfully going forward.

 

Leisure Travel Financials

Unaudited

Restated



2019

2018

C


£m

£m

Change 

Revenue

2,964.4

2,211.4

34%

Net operating expenses

(2,765.3)

(2,089.6)

(32%)

Operating profit

199.1

121.8

63%

Net financing expense (excluding net FX revaluation)

(25.6)

(16.3)

(57%)

Profit on disposal of property, plant and equipment

2.3

0.3


Profit before FX revaluation and taxation

175.8

105.8

66%

Net FX revaluation (losses) / gains

(2.6)

20.0


Profit before taxation

173.2

125.8

38%





Net financing expense / (income)

28.2

(3.7)


Depreciation

128.7

108.9

(18%)

EBITDA

330.1

231.0

43%





Operating profit margin

6.7%

5.5%

1.2 ppts

Profit before FX revaluation and taxation margin

5.9%

4.8%

1.1 ppts

Profit before taxation margin

5.8%

5.7%

0.1 ppts

EBITDA margin 

11.1%

10.4%

0.7 ppts

                                                             

 

Leisure Travel Key Performance Indicators

Unaudited

 Restated



2019

2018

Change

Number of routes operated during the year

329

306

8%

Leisure Travel sector seats available (capacity)

13.81m

11.27m

23%

Leisure Travel passenger sectors flown

12.82m

10.38m

24%

Leisure Travel load factor

92.8%

92.2%

0.6 ppts

Flight-only passenger sectors flown

6.49m

5.37m

21%

Package holiday customers

3.17m

2.50m

27%

Flight-only ticket yield per passenger sector (excl. taxes)

£81.79

£73.01

12%

Average package holiday price

£669

£633

6%

Non-ticket revenue per passenger sector *

£24.07

£22.52

7%

Average hedged price of fuel (per tonne)

$604

$516

17%

Fuel requirement hedged - next 12 months

90%

90%

-

Advance sales made as at 31 March

£1,734.5m

£1,486.6m

17%

 

* Presentation of the Non-ticket revenue per passenger sector KPI has been adjusted for the impact of IFRS 15 and also to remove certain non-ticket revenue items included within the Average package holiday price KPI.

 

Segmental Performance - Distribution & Logistics

 

Revenue at Fowler Welch increased by 6% to £178.7m (2018: £168.6m) as two significant contracts commenced mid-way through the financial year, supplemented by organic growth. Operationally, the business performed well, though varying chilled volume profiles at certain depots led to some operational inefficiency as customer service levels were maintained. As a result, profit before taxation fell slightly by £0.1m to £4.3m (2018: £4.4m).

 

Our Spalding depot located in the major growing and key food producing region of Lincolnshire, is one of the largest chilled food consolidation warehouses in the UK and is the largest chilled site in the Fowler Welch network. Following investment in the previous financial year to create a more efficient and modern environment, revenue in the year to 31 March 2019 grew by 2.4% as new long-term customer contracts were secured. This operation now distributes over 60,000 pallets each week. The benefit of the new contracts will be greater in the current financial year due to the full-year volume effect and the non-recurrence of start-up costs.

 

Revenue growth of 2.7% from our Kent distribution facilities at Teynham and Paddock Wood was driven by incremental volume from existing customers. These distribution facilities sit in the heart of that county's fruit growing areas and their proximity to both the port of Dover and the Channel Tunnel make them ideally positioned to provide packing and distribution services for businesses producing locally and for fruit and produce imported from across the English Channel.

 

The performance of Integrated Service Solutions (ISS), Fowler Welch's joint venture operation at Teynham, which ripens, grades and packs a variety of stone fruit, berries and exotic fruits, was particularly pleasing. The business delivered a significant year-on-year revenue increase underpinned by a growth in berry categories which led to improved profitability. Further product packing opportunities place ISS in a strong position for the future.

 

The Hilsea depot, which is located near to Portsmouth International Port, achieved a revenue increase of 10% as it benefited from growth across several suppliers, demonstrating the importance of this region in providing salads, herbs and vegetables to UK retailers and underlining the strength of the range of warehousing, consolidation and distribution services offered.

 

The regional distribution centres at Washington in Tyne and Wear and Newton Abbot, near Exeter in Devon continued to provide high quality direct store delivery services to over 100 supermarkets and both sites achieved improved profit performance year on year.

 

A strong revenue pipeline at our operation at Nuneaton saw several new customers added towards the end of the financial year, with others implemented at the start of the current financial year.

 

Our 500,000 square foot ambient (non-temperature controlled) shared user distribution facility at Heywood near Bury, Greater Manchester made good progress in the year. Investment in the site has delivered an improvement to operational service, with a subsequent improvement to financial performance towards the end of the year. This positive momentum is expected to continue into the current financial year.

 

With its strong and committed team, and the expertise and flexibility to operate effectively in both the temperature-controlled (chilled and produce) and ambient arenas, we remain confident in the future growth prospects for Fowler Welch.  

 

Distribution & Logistics Financials

Unaudited




2019

2018



£m

£m

Change

Revenue

178.7

168.6

6%

Net operating expenses

(174.4)

(164.2)

(6%)

Operating profit

4.3

4.4

(2%)

Net financing expense

-

-


Profit before taxation

4.3

4.4

(2%)





Depreciation

2.8

2.7

4%

EBITDA

7.1

7.1

-



 


Operating profit margin

2.4%

2.6%

(0.2 ppts)

Profit before taxation margin

2.4%

2.6%

(0.2 ppts)

EBITDA margin

4.0%

4.2%

(0.2 ppts)

 

Distribution & Logistics Key Performance Indicators

Unaudited




2019

2018

Change

Warehouse space as at 31 March (square feet)

897,000

897,000

-

Number of tractor units in operation

530

515

3%

Number of trailer units in operation

764

742

3%

Miles per gallon

9.7

9.7

-

Annual fleet mileage

49.9m

49.4m

1%

 

 

 

Gary Brown

Group Chief Financial Officer

 

11 July 2019

 

For further information please contact:

Dart Group plc

Philip Meeson, Executive Chairman

Gary Brown, Group Chief Financial Officer

0113 239 7817

Cenkos Securities plc

Nominated Adviser

David Jones / Katy Birkin

020 7397 8900

Canaccord Genuity

Joint Broker

Adam James

020 7523 8000

Arden Partners

Joint Broker

Tom Price / Simon Johnson

020 7614 5900

Buchanan

Financial PR

Richard Oldworth

020 7466 5000

 

This announcement may include statements that are, or may be deemed to be, "forward-looking statements" (including words such as "believe", "expect", "estimate", "intend", "anticipate" and words of similar meaning). By their nature, forward-looking statements involve risk and uncertainty since they relate to future events and circumstances, and actual results may, and often do, differ materially from any forward-looking statements. Any forward-looking statements in this announcement reflect management's view with respect to future events as at the date of this announcement. Save as required by applicable law, the Company undertakes no obligation to publicly revise any forward-looking statements in this announcement, whether following any change in its expectations or to reflect events or circumstances after the date of this announcement.

 

COnsolidated income statement

for the year ended 31 March 2019

 



Unaudited

Results for the

year ended

 31 March 2019


Restated

Results for the

year ended

 31 March 2018



£m


£m

Revenue


3,143.1


2,380.0






Net operating expenses


(2,939.7)


(2,253.8)

Operating profit


203.4


126.2






Finance income


10.7


4.8

Finance expense


(36.3)


(21.1)

Net FX revaluation (losses) / gains


(2.6)


20.0

Net financing (expense) / income


(28.2)


3.7






Profit on disposal of property, plant and equipment


2.3


0.3






Profit before taxation


177.5


130.2






Taxation


(31.9)


(23.1)

Profit for the year


145.6


107.1

all attributable to equity shareholders of the parent










Earnings per share





- basic


97.98p


72.16p

- diluted


97.68p


71.83p






 
Consolidated statement of comprehensive income

for the year ended 31 March 2019

 

 

Unaudited

year ended

31 March 2019

£m


Restated

year ended

31 March 2018

£m





Profit for the year

145.6


107.1





Other comprehensive (expense) / income




Items that are or may be reclassified subsequently to profit or loss:




Cash flow hedges:




  Fair value (losses) / gains

(37.9)


50.6

  Add back gains transferred to income statement

(23.6)


(58.7)

  Related taxation credit

11.4


1.5





Revaluation of foreign operations

(1.3)


0.7


(51.4)


(5.9)





Total comprehensive income for the period

94.2


101.2

all attributable to equity shareholders of the parent




 

Consolidated Statement of Financial Position

at 31 March 2019

 



Unaudited

2019


Restated

2018



£m


£m

Non-current assets

 

 

 

 

Goodwill


6.8


6.8

Property, plant and equipment


1,285.7


1,083.0

Derivative financial instruments


4.1


23.7



1,296.6


1,113.5

Current assets

 

 

 


Inventories


1.6


1.8

Trade and other receivables


319.8


258.2

Derivative financial instruments


50.0


64.3

Money market deposits


50.0


220.2

Cash and cash equivalents


1,224.3


788.4



1,645.7


1,332.9

Total assets


2,942.3


2,446.4






Current liabilities

 

 

 


Trade and other payables


217.0


159.9

Deferred revenue


937.1


806.0

Borrowings


74.4


88.6

Provisions and liabilities


46.3


41.7

Derivative financial instruments


55.0


40.7



1,329.8


1,136.9

Non-current liabilities





Deferred revenue


2.8


1.3

Borrowings                 


908.7


718.0

Derivative financial instruments


21.5


8.2

Deferred taxation


84.1


68.2



1,017.1


795.7

Total liabilities


2,346.9


1,932.6

Net assets


595.4


513.8

Shareholders' equity





Share capital


1.9


1.9

Share premium


12.8


12.7

Cash flow hedging reserve 


(18.5)


31.6

Other reserves


(0.6)


0.7

Retained earnings


599.8


466.9






Total shareholders' equity


595.4


513.8

 

consolidated statement of cash flows

for the year ended 31 March 2019

 


Unaudited

2019


Restated

2018


£m


£m





Profit on ordinary activities before taxation

177.5


130.2

Finance income

(10.7)


(4.8)

Finance expense

36.3


21.1

Net FX revaluation losses / (gains)

2.6


(20.0)

Depreciation

131.5


111.6

Profit on disposal of property, plant and equipment

(2.3)


(0.3)

Equity settled share based payments

0.4


0.4

Operating cash flows before movement in working capital

335.3


238.2





Decrease / (increase) in inventories

0.2


(0.6)

Increase in trade and other receivables

(61.6)


(52.6)

Increase in trade and other payables

60.3


27.8

Increase in deferred revenue

132.6


209.9

Increase in provisions and liabilities

3.5


4.5

Cash generated from operations

470.3


427.2





Interest received

10.7


4.8

Interest paid

(32.3)


(17.2)

Income taxes (paid) / received

(7.8)


0.1





Net cash generated from operating activities

440.9


414.9





Cash flows used in investing activities




Purchase of property, plant and equipment

(302.3)


(411.1)

Proceeds from sale of property, plant and equipment

3.5


0.3

Net decrease / (increase) in money market deposits

170.2


(19.9)

Net cash used in investing activities

(128.6)


(430.7)

 




Cash from financing activities




Repayment of borrowings

(96.7)


(128.8)

New loans advanced

228.3


458.2

Proceeds on issue of shares

0.1


0.3

Equity dividends paid

(13.1)


(8.0)

Net cash from financing activities

118.6


321.7

 

 

 


Net increase in cash in the year

430.9

 

305.9

 

 

 


Cash and cash equivalents at beginning of year

788.4

 

488.7

Effect of foreign exchange rate changes

5.0

 

(6.2)

 

 

 


Cash and cash equivalents at end of year

1,224.3

 

788.4

 

Consolidated statement of changes in equity

for the year ended 31 March 2019

 


Share

capital

Share premium

Cash flow hedging reserve

Other

 reserves

Retained earnings

Total  shareholders' equity


£m

£m

£m

£m

£m

£m








Balance at 31 March 2017

- as originally reported

1.8

12.5

38.2

-

378.9

431.4








Effect of transition to IFRS 15

-

-

-

-

(11.5)

(11.5)








Balance at 31 March 2017 - as restated

1.8

12.5

38.2

-

367.4

419.9








Total comprehensive income

-

-

(6.6)

0.7

107.1

101.2

Issue of share capital

0.1

0.2

-

-

-

0.3

Dividends paid in the year

-

-

-

-

(8.0)

(8.0)

Share based payments

-

-

-

-

0.4

0.4








Balance at 31 March 2018 -

as restated

1.9

12.7

31.6

0.7

466.9

513.8








Total comprehensive income

-

-

(50.1)

(1.3)

145.6

94.2

Issue of share capital

-

0.1

-

-

-

0.1

Dividends paid in the year

-

-

-

-

(13.1)

(13.1)

Share based payments

-

-

-

-

0.4

0.4








Unaudited Balance at

31 March 2019

1.9

12.8

(18.5)

(0.6)

599.8

595.4

 
Notes to the UNAUDITED PRELIMINARY ANNOUNCEMENT

for the year ended 31 March 2019

1.   Accounting policies and general information

Basis of preparation

The Group's condensed consolidated financial information has been prepared and approved by the Board of Directors in accordance with International Financial Reporting Standards, as adopted by the European Union ("Adopted IFRS") and with those parts of the Companies Act 2006 applicable to the companies reporting under IFRS.

Whilst the information included in this preliminary announcement has been prepared in accordance with Adopted IFRS, the financial information contained within this preliminary announcement for the years ended 31 March 2019 and 31 March 2018 does not itself contain sufficient information to comply with Adopted IFRS and nor does it comprise statutory financial statements within the meaning of section 434 of the Companies Act 2006.

The financial information for 2018 is derived from the statutory accounts for the year ended 31 March 2018, which have been delivered to the Registrar of Companies. The Auditor has reported on the year ended 31 March 2018 accounts; their report:

i.              was unqualified;

ii.             did not include a reference to any matters to which the Auditor drew attention by way of emphasis without qualifying their report; and

iii.            did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

In this report, the comparative figures for the year ended 31 March 2018 have been restated for the impact of IFRS 15 and for the revised presentation of accrued and deferred revenue - see note 7 for further details.

The statutory accounts for the year ended 31 March 2019 will be finalised on the basis of the financial information presented by the Board of Directors in this preliminary announcement and will be delivered to the Registrar of Companies in due course.

The 2019 Annual Report and Accounts (including the Auditor's Report) will be made available to shareholders during the week commencing 12 August 2019. The Dart Group plc Annual General Meeting will be held on 5 September 2019.

The financial information has been prepared under the historical cost convention except for all derivative financial instruments, which have been measured at fair value.

The Group's financial information is presented in pounds sterling and all values are rounded to the nearest £100,000 except where indicated otherwise.

Going concern

The Directors have prepared financial forecasts for the Group, comprising profit before and after taxation, balance sheets and cash flows through to 31 March 2022.

For the purpose of assessing the appropriateness of the preparation of the Group's accounts on a going concern basis, the Directors have considered the current cash position, the availability of banking facilities and sensitised forecasts of future trading through to 31 March 2022, including performance against financial covenants, the implications, including those considered remote, of Brexit and the assessment of principal areas of risk and uncertainty.

Having considered the points above, the Directors have a reasonable expectation that the Group as a whole has adequate resources to continue in operational existence for a period of 12 months from the date of approval of the financial statements. For this reason, they continue to adopt the going concern basis in preparing the financial statements for the year ended 31 March 2019.

2.   New IFRS effective in the current year

Both IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments became mandatorily effective in the current year. These standards apply to accounting periods beginning after January 2018.

IFRS 15 Revenue from Contracts with Customers

The Group has adopted IFRS 15 for the year ended 31 March 2019 and has applied the fully retrospective transition method, with the comparative year and opening net assets (as at 1 April 2017) restated. This new standard supersedes all existing revenue requirements in IFRS. Its core principle is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. 

IFRS 15 discusses whether a contract contains more than one distinct good or service. In light of this guidance, the Group considered whether its package holidays offering contained more than one promised service, and concluded that a package holiday constituted delivery of one distinct performance obligation including flights, accommodation, transfers and other holiday-related services.

Under IFRS 15, revenues are recognised when a performance obligation is satisfied, which happens when control of the goods or services underlying the particular performance obligation is transferred to the customer. The impact of this for the Leisure Travel business is to defer the recognition of certain non-ticket revenue streams to the date of departure rather than the date of booking. The revenue associated with Package Holidays is now apportioned over the duration of the holiday, where it was previously recognised on departure. The performance obligations for the Distribution & Logistics business have also been considered, and there are no changes in the timing of revenue recognition as a result of implementing IFRS 15.   

In addition, a proportion of flight delay compensation payments made to customers, previously recorded wholly within net operating expenses, are now offset against revenues up to the full value of the ticket price. This presentational change has reduced revenue where the performance obligation has not been fully satisfied, but has a net nil impact on the overall profit for the period.

The impact on the Group's financial information for the year ended 31 March 2018 is shown in Note 7.

IFRS 9 Financial Instruments

The Group has also adopted IFRS 9 for the year ended 31 March 2019.  This new standard replaces current guidance provided by IAS 39 on classification and measurement of financial assets and liabilities. In addition, IFRS 9 includes new requirements for general hedge accounting and impairment of financial assets. 

Under IFRS 9, all recognised financial assets within scope are required to be subsequently measured at amortised cost or fair value. The classification of each financial asset is based on whether the business model of the Group is to hold assets to collect contractual cash flows or to benefit from changes in the fair value of assets. The Group financial information has not been impacted by this change.   

The impairment model under IFRS 9 reflects expected credit losses, as opposed to only incurred credit losses under IAS 39. The Group has applied the practical expedient afforded by IFRS 9 in calculating credit losses and therefore has not recorded any changes to its current impairment calculations.

Finally, under IFRS 9, greater flexibility has been introduced to the types of transactions eligible for hedge accounting. This new guidance is aligned with the Group's current hedging policy and therefore does not result in any material changes.

Overall, there is no impact on the Group's net assets or profit for the period on transition to IFRS 9.

3.   Segmental reporting

IFRS 8 Operating Segments requires operating segments to be determined based on the Group's internal reporting to the Chief Operating Decision Maker. For management purposes, the Group is organised into two operating segments: Leisure Travel and Distribution & Logistics. These operating segments are consistent with how information is presented to the Board of Directors (the Chief Operating Decision Maker) for the purpose of resource allocation and assessment of their performance and as such, they are also deemed to be the reporting segments.

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated on consolidation. 

 


Leisure

Travel

Distribution

& Logistics

Group

eliminations

Total

Unaudited

Year ended 31 March 2019

 

£m

£m

£m

£m

Revenue

2,964.4

178.7

-

3,143.1






Operating profit

199.1

4.3

-

203.4






Finance income

10.7

-

-

10.7

Finance expense

(36.3)

-

-

(36.3)

Net FX revaluation losses

(2.6)

-

-

(2.6)

Net financing expense

(28.2)

-

-

(28.2)






Profit on disposal of property, plant and equipment

2.3

-

-

2.3

Profit before taxation

173.2

4.3

-

177.5

Taxation

(31.1)

(0.8)

-

(31.9)

Profit after taxation

142.1

3.5

-

145.6






Assets and liabilities





Segment assets

2,854.9

87.4

-

2,942.3

Segment liabilities

(2,322.7)

(24.2)

-

(2,346.9)

Net assets

532.2

63.2

-

595.4





 

Other segment information





Property, plant and equipment

additions

299.4

2.9

-

302.3

Depreciation, amortisation

and impairment

(128.7)

(2.8)

-

(131.5)

Share based payments

(0.3)

(0.1)

-

(0.4)

 


Restated

Leisure

Travel

Distribution

& Logistics

Group

eliminations

Restated

Total

Year ended 31 March 2018

 

£m

£m

£m

£m

Revenue

2,211.4

168.6

-

2,380.0






Operating profit

121.8

4.4

-

126.2






Finance income

4.8

-

-

4.8

Finance expense

(21.1)

-

-

(21.1)

Net FX revaluation gains

20.0

-

-

20.0

Net financing income

3.7

-

-

3.7






Profit on disposal of property, plant and equipment

0.3

-

-

0.3

Profit before taxation

125.8

4.4

-

130.2

Taxation

(22.4)

(0.7)

-

(23.1)

Profit after taxation

103.4

3.7

-

107.1






Assets and liabilities





Segment assets

2,364.8

86.5

(4.9)

2,446.4

Segment liabilities

(1,910.6)

(26.9)

4.9

(1,932.6)

Net assets

454.2

59.6

-

513.8





 

Other segment information





Property, plant and equipment

additions

405.2

5.9

-

411.1

Depreciation, amortisation

and impairment

(108.9)

(2.7)

-

(111.6)

Share based payments

(0.3)

(0.1)

-

(0.4)

 

4.   Net operating expenses


Unaudited


Restated


2019


2018


£m


£m

Direct operating costs    




Accommodation costs

1,102.9


831.9

Fuel

305.8


222.3

Landing, navigation and third-party handling

279.4


219.4

Maintenance costs

109.8


77.7

Aircraft and vehicle rentals

75.9


63.1

Agent commission

59.8


48.1

In-flight cost of sales

46.5


35.4

Subcontractor charges

42.4


40.3

Other direct operating costs

116.7


85.5

Staff costs including agency staff

439.9


336.8

Depreciation of property, plant and equipment

131.5


111.6

Other operating charges

232.4


183.9

Other operating income

(3.3)


(2.2)

Total net operating expenses   

2,939.7


2,253.8

 

5.   Net financing (expense) / income

 

 

Unaudited

2019


 

2018


£m


£m

Finance income

10.7


4.8

Interest payable on aircraft and other loans

(16.3)


(13.0)

Interest payable on obligations under finance leases

(20.0)


(8.1)

Net foreign exchange revaluation (losses) / gains

(2.6)


20.0

Net financing (expense) / income

(28.2)


3.7

 

6.   Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to the equity owners of the parent company by the weighted average number of ordinary shares in issue during the year.

Diluted earnings per share is calculated by dividing the profit attributable to the equity owners of the parent company by the weighted average number of ordinary shares in issue during the year, adjusted for the effects of potentially dilutive instruments.


Unaudited


Restated

As originally reported


2019


2018

2018


Earnings

£m

Weighted average number of shares

EPS

pence


Earnings

£m

Weighted average number of shares

EPS

pence

EPS

pence

Basic EPS









Profit attributable to ordinary shareholders

145.6

148,698,533

97.98


107.1

148,415,077

72.16

74.59

Effect of dilutive instruments








Share options and deferred awards

-

455,530

(0.30)


-

682,262

(0.33)

(0.34)

Diluted EPS

145.6

149,154,063

97.68


107.1

149,097,339

71.83

74.25

 

7.   Restatement of prior year information

The following tables summarise restatement of previously reported financial information.

Consolidated Income Statement



 

for the year ended 31 March 2018







Year ended

Year ended

Year ended



31 March

2018

31 March

2018

31 March

2018



As restated

IFRS 15 Adjustments

As originally reported



£m

£m

£m






Revenue


2,380.0

(11.8)

2,391.8

Net operating expenses


(2,253.8)

7.4

(2,261.2)

Operating profit


126.2

(4.4)

130.6

Finance income


4.8

-

4.8

Finance expense


(21.1)

-

(21.1)

Net FX revaluation gains


20.0

-

20.0

Net financing income


3.7

-

3.7

Profit on disposal of property, plant and equipment


0.3

-

0.3

Profit before taxation


130.2

(4.4)

134.6

Taxation


(23.1)

0.8

(23.9)

Profit for the period


107.1

(3.6)

110.7

 

Total comprehensive income for the period


101.2

(3.6)

104.8

 

The impact of IFRS 15 is:

·    to defer the recognition of certain non-ticket revenue streams to the date of departure rather than the date of booking, resulting in a reduction in revenue and an increase in deferred revenue;

·    to apportion the revenue associated with Package Holidays over the duration of the holiday, where it was previously recognised on departure, resulting in a reduction in revenue and an increase in deferred revenue. The costs of a Package Holiday are also apportioned over the duration of the holiday, resulting in a reduction in net operating expenses and a decrease in accruals; and

·    to offset a proportion of flight delay compensation payments made to customers, previously recorded wholly within net operating expenses, against revenue up to the full value of the ticket price, resulting in a reduction in revenue and a reduction in net operating expenses. 

 

Consolidated Statement of Financial Position

at 31 March 2018


Year ended

Year ended

Year ended

Year ended


31 March 2018

31 March 2018

31 March 2018

31 March 2018


As restated

Accrued revenue

restatement

IFRS 15 Adjustments

As originally reported


£m

£m

£m

£m

Non-current assets





Goodwill

6.8

-

-

6.8

Property, plant and equipment

1,083.0

-

-

1,083.0

Derivative financial instruments

23.7

-

-

23.7


1,113.5

-

-

1,113.5

Current assets





Inventories

1.8

-

-

1.8

Trade and other receivables

258.2

(679.2)

-

937.4

Derivative financial instruments

64.3

-

-

64.3

Money market deposits

220.2

-

-

220.2

Cash and cash equivalents

788.4

-

-

788.4


1,332.9

(679.2)

-

2,012.1

Total assets

2,446.4

(679.2)

-

3,125.6

Current liabilities





Trade and other payables

159.9

-

(12.4)

172.3

Deferred revenue

806.0

(675.4)

30.8

1,450.6

Borrowings

88.6

-

-

88.6

Provisions and liabilities

41.7

-

-

41.7

Derivative financial instruments

40.7

-

-

40.7


1,136.9

(675.4)

18.4

1,793.9

Non-current liabilities





Deferred revenue

1.3

(3.8)

-

5.1

Borrowings

718.0

-

-

718.0

Derivative financial instruments

8.2

-

-

8.2

Deferred taxation

68.2

-

(3.3)

71.5


795.7

(3.8)

(3.3)

802.8

Total liabilities

1,932.6

(679.2)

15.1

2,596.7

Net assets

513.8

-

(15.1)

528.9






Shareholders' equity





Share capital

1.9

-

-

1.9

Share premium

12.7

-

-

12.7

Cash flow hedging reserve

31.6

-

-

31.6

Other reserves

0.7

-

-

0.7

Retained earnings

466.9

-

(15.1)

482.0

Total shareholders' equity

513.8

-

(15.1)

528.9

 

In previous years, balance payments not yet due or invoiced for package holidays were recognised on booking within trade receivables, with a corresponding balance in deferred revenue. As these payments are not yet due, an adjustment has been made to remove the receivable for balance payments not yet due or invoiced and the associated entry in deferred revenue.  This amended presentation is in line with standard industry practices.

 

Consolidated Statement of Financial Position

at 31 March 2017


Year ended

Year ended

Year ended

Year ended


31 March 2017

31 March 2017

31 March 2017

31 March 2017


As restated

Accrued revenue

restatement

IFRS 15 Adjustments

As originally reported


£m

£m

£m

£m

Non-current assets





Goodwill

6.8

-

-

6.8

Property, plant and equipment

806.5

-

-

806.5

Derivative financial instruments

9.3

-

-

9.3


822.6

-

-

822.6

Current assets





Inventories

1.2

-

-

1.2

Trade and other receivables

206.4

(501.4)

-

707.8

Derivative financial instruments

74.7

-

-

74.7

Money market deposits

200.3

-

-

200.3

Cash and cash equivalents

488.7

-

-

488.7


971.3

(501.4)

-

1,472.7

Total assets

1,793.9

(501.4)

-

2,295.3

Current liabilities





Trade and other payables

129.7

-

(6.6)

136.3

Deferred revenue

596.6

(500.3)

20.6

1,076.3

Borrowings

129.6

-

-

129.6

Provisions and liabilities

38.8

-

-

38.8

Derivative financial instruments

15.9

-

-

15.9


910.6

(500.3)

14.0

1,396.9

Non-current liabilities





Deferred revenue

0.6

(1.1)

-

1.7

Borrowings

390.9

-

-

390.9

Derivative financial instruments

20.9

-

-

20.9

Deferred taxation

51.0

-

(2.5)

53.5


463.4

(1.1)

(2.5)

467.0

Total liabilities

1,374.0

(501.4)

11.5

1,863.9

Net assets

419.9

-

(11.5)

431.4






Shareholders' equity





Share capital

1.8

-

-

1.8

Share premium

12.5

-

-

12.5

Cash flow hedging reserve

38.2

-

-

38.2

Other reserves

-

-

-

-

Retained earnings

367.4

-

(11.5)

378.9

Total shareholders' equity

419.9

-

(11.5)

431.4

 

8.   Alternative performance measures

The Group's alternative performance measures are not defined by IFRS and therefore may not be directly comparable with other companies' alternative performance measures. These measures are not intended to be a substitute for, or superior to, IFRS measurements.

Profit before FX revaluation and taxation

Profit before FX revaluation and taxation is included as an alternative performance measure in order to aid users in understanding the underlying operating performance of the Group excluding the impact of foreign exchange volatility. 

This is reconciled to the IFRS measure of profit before taxation as part of the Summary Income Statement within the Business and Finance Review. 

EBITDA

Earnings before interest, tax, depreciation and amortisation (EBITDA) is included as an alternative performance measure in order to aid users in understanding the underlying operating performance of the Group and growth in profitability of the operations.

This is reconciled to the IFRS measure of profit before taxation as part of the Summary Income Statement within the Business and Finance Review.

 

9.   Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
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