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DTG Dart Group Plc

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Share Name Share Symbol Market Type Share ISIN Share Description
Dart Group Plc LSE:DTG London Ordinary Share GB00B1722W11 ORD 1.25P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 728.50 730.00 732.00 0.00 01:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Jet2 PLC Half-year Report (4094H)

24/11/2022 7:00am

UK Regulatory


Dart (LSE:DTG)
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From Jun 2022 to Jun 2024

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TIDMJET2

RNS Number : 4094H

Jet2 PLC

24 November 2022

Jet2 plc

Interim Results

Jet2 plc , the Leisure Travel group ("the Group" or "the Company"), announces its unaudited interim results for the half year ended 30 September 2022.

 
 Group financial highlights                        Half year ended   Half year ended   Half year end   Half year ended 
                                                      30 September      30 September          change      30 September 
                                                              2022              2021                              2019 
                                                         Unaudited         Unaudited                         Unaudited 
------------------------------------------------  ----------------  ----------------  --------------  ---------------- 
 Revenue                                               GBP3,567.6m         GBP429.6m            730%       GBP2,615.2m 
================================================  ================  ================  ==============  ================ 
 Operating profit / (loss)                               GBP516.6m       (GBP170.4m)            403%         GBP365.0m 
================================================  ================  ================  ==============  ================ 
 Profit / (loss) before FX revaluation and               GBP505.0m       (GBP195.1m)            359%         GBP349.8m 
 taxation* 
================================================  ================  ================  ==============  ================ 
 Profit / (loss) before taxation                         GBP450.7m       (GBP205.8m)            319%         GBP339.7m 
================================================  ================  ================  ==============  ================ 
 Profit / (loss) for the period after taxation           GBP356.0m       (GBP163.5m)            318%         GBP278.6m 
================================================  ================  ================  ==============  ================ 
 Basic earnings per share                                   165.9p           (76.2p)            318%            187.0p 
================================================  ================  ================  ==============  ================ 
 Interim dividend per share                                   3.0p                 -            100%              3.0p 
------------------------------------------------  ----------------  ----------------  --------------  ---------------- 
 

* Further information on the calculation of this measure can be found in Note 4.

 
  --   Despite a difficult return to normal operations, Group profit 
        before foreign exchange revaluation and taxation increased 
        to GBP505.0m (2021: GBP195.1m loss), which was also 44% ahead 
        of the 2019 pre-Covid performance. Total profit for the period 
        after taxation was GBP356.0m (2021: GBP163.5m loss). 
  --   Seat capacity increased 14% against Summer 2019 and buoyant 
        customer demand resulted in the business achieving an average 
        load factor of 90.7% (2019: 93.1%). Higher margin Package 
        Holiday customers mix of total departing passengers was 65.9%, 
        up 13.1ppts against Summer 2019 (2019: 52.8%). 
  --   Flight-only ticket yield per passenger sector at GBP105.00 
        (2021: GBP73.27) was 43% higher than the prior period, due 
        to changes in the mix of destinations flown, notably to those 
        in the Eastern Mediterranean, and strong consumer demand 
        meaning fewer promotional offers were required. 
  --   Our operations were directly impacted by the broader disruption 
        seen across the aviation sector and its supply chains in 
        mid-summer as was widely reported in the media, which has 
        resulted in significant delay and compensation costs in excess 
        of GBP50.0m. 
  --   Overall liquidity improved significantly with a total cash 
        balance (including money market deposits) at the half year 
        end of GBP2,830.7m, an increase of 39% (2021: GBP2,036.9m). 
        Our 'Own Cash' position (excluding customer deposits) of 
        GBP1,968.6m increased 29% (2021: GBP1,524.3m). 
  --   In mid-October 2022, we were delighted to announce that we 
        had entered into an agreement to purchase a further 35 new 
        firm ordered Airbus A320/A321 neo aircraft with the ability 
        to extend up to 71 aircraft. With its previous orders, the 
        Group now has a total of 98 firm ordered Airbus A320/A321 
        neo aircraft, which could eventually extend up to 146 aircraft, 
        and critically has certainty of supply well into the next 
        decade. 
  --   With Winter 2022/23 bookings encouraging and pricing remaining 
        robust, but recognising that the important post-Christmas 
        booking period is still to come, we are presently on track 
        to exceed current average market expectations for Group profit 
        before FX revaluation and taxation for the year ending 31 
        March 2023. 
  --   Looking ahead, the Group faces input cost pressures including 
        fuel, carbon, a strengthened US dollar and wage increases, 
        plus investment to ensure our Colleagues can thrive and have 
        a balanced lifestyle, further underpinning our operational 
        resilience. This leads us to conclude that margins may come 
        under some pressure. 
  --   The Right Product for Tougher Times - our well-established 
        truly variable duration holidays and wide ranging product 
        portfolio will provide customers with plenty of choice and 
        flexibility to be able to tailor their holiday plans to meet 
        their individual budgets. As a result, we remain confident 
        that our Customers' eagerness to take their much valued and 
        anticipated holidays will remain high. 
 

Chairman's Statement

I am pleased to report on the Group's trading for the half year ended 30 September 2022, which encompasses Jet2holidays, our acclaimed ATOL licensed package holidays provider, and Jet2.com, our award-winning leisure airline.

Results for the half year

Despite a difficult return to normal operations, primarily due to the lack of planning and preparedness of many airports and associated suppliers, and having absorbed substantial associated disruption costs, Group profit before foreign exchange revaluation and taxation increased to GBP505.0m (2021: GBP195.1m loss), which was also 44% ahead of the 2019 pre-Covid performance. Total profit for the period after taxation was GBP356.0m (2021: GBP163.5m loss).

Our Leisure Travel business has continued its encouraging recovery following the reopening of international travel in early 2022. Strong customer demand, in particular for package holidays, plus a robust pricing environment and considered cost control, have underpinned a substantially improved financial performance compared to recent Covid impacted summer seasons, but also against pre-Covid Summer 2019.

The business made considerable investment well ahead of Summer 2022, retaining over 8,000 loyal colleagues throughout the pandemic and significantly topping up the Coronavirus Job Retention Scheme funding on a sliding scale basis up to 100% of salary for the lowest paid, recruiting and training seasonal colleagues in good time, making substantial marketing investments, plus early and meaningful salary increases for all colleagues. This left us very well prepared for our summer operation and also enabled Jet2.com to earn the accolade of being the only UK airline not to cancel a flight during July and August 2022, according to leading travel intelligence company, OAG.

For the reporting period, seat capacity increased 14% against Summer 2019 and buoyant customer demand resulted in the business achieving an average load factor of 90.7% (2019: 93.1%), with package holiday customers displaying a materially higher mix of the total departing passengers at 65.9%, up 13.1ppts against Summer 2019 (2019: 52.8%).

Despite our Colleagues working incredibly hard and consistently going the extra mile to take our Customers on their long-awaited holidays, unfortunately some customers still faced frustrating delays as our operations were directly impacted by the broader disruption seen across the aviation sector and its supply chains as was widely reported in the media. Regrettably, this resulted in Jet2 incurring delay, compensation and customer expenses reimbursement costs in excess of GBP50.0m under UK (EU) Regulation 261/2004 ("EU261/2004") which was materially higher than in Summer 2019.

In addition, our inflight retail financial performance was weaker than expected, due to product supply chain issues early in the summer season, plus poor onboard product availability caused by resource constraints at our third party inflight retail provider.

Given these very challenging circumstances, the Board is hugely appreciative of all our Colleagues' tremendous efforts and support over recent months.

As is typical for the business, losses are to be expected in the second half of the financial year, as we continue to invest in: additional aircraft; marketing to ensure we optimise our pre-Summer 2023 forward booking position; retaining increasing numbers of colleagues through the winter months to ensure maximum operational resilience ahead of next summer; and attracting new colleagues in readiness for further expansion of our exciting package holiday and flight-only offerings for Summer 2023, in line with our planned growth targets.

Interim Dividend

Basic earnings per share increased to 165.9p (2021: (76.2p)) and in view of the current full year outlook, the Board has decided to pay an interim dividend of 3.0p per share (2021: GBPnil). The dividend will be paid on 3 February 2023 to shareholders on the register at 30 December 2022, with the ex-dividend date being 29 December 2022.

Sustainability

The Group continued to implement its Sustainability Strategy with the vision to become "the leading brand in sustainable air travel and package holidays". All of our airline emissions not already covered by mandatory carbon pricing mechanisms, namely the UK and EU Emissions Trading Schemes (ETS), have been offset during the period. In addition, the Group is actively negotiating access to Sustainable Aviation Fuel through various channels. More detailed information on the Group's Sustainability Strategy can be found at www.jet2plc.com/sustainability .

Post reporting date events

The strength of our recovery post Covid reinforces our view that we have a great future in the leisure travel industry. Consequently, we were delighted to announce in mid-October 2022 that we were building upon our previous aircraft order with Airbus of up to 75 A321 neo aircraft (63 now firm ordered) and entering into an agreement to purchase a further 35 new firm ordered Airbus A320/A321 neo aircraft with the ability for this to extend up to 71 aircraft. The A321 neo aircraft provides additional environmental and operating benefits through lower fuel consumption per passenger and therefore lower emissions and is, in our opinion, on a per passenger basis, the most fuel efficient and sustainable aircraft in its class today. In addition, this latest order further supports our determination to sustainably grow our successful business and expand our fleet in line with the demand for our award--winning package holidays and flights, whilst also giving the ability to retire less efficient earlier aircraft models.

These latest firm ordered aircraft deliveries stretch over three years until 2031, and at base price represent a total value of approximately $3.9 billion, with a total transaction value for up to 71 aircraft of approximately $8.0 billion, though the Company has negotiated significant discounts from the base price.

The Group now has 98 firm ordered Airbus A320/A321 neo aircraft, which could eventually extend up to 146 aircraft and critically has certainty of supply well into the next decade. The Company will retain flexibility in determining the most favourable method of financing the aircraft, which will be through a combination of internal resources and debt.

Outlook - The Right Product for Tougher Times

With Winter 2022/23 bookings encouraging and pricing remaining robust, but recognising that the important post-Christmas booking period is still to come, we are presently on track to exceed current average market expectations for Group profit before FX revaluation and taxation for the year ending 31 March 2023.

Looking ahead, current seat capacity for Summer 2023 is approximately 5% higher than Summer 2022 (and approximately 20% higher than Summer 2019) with bookings at this very early stage encouraging, average load factors broadly in line with Summer 2019 at the same point and pricing strong.

However, the Group faces input cost pressures including fuel, carbon, a strengthened US dollar and wage increases, plus investment to ensure our Colleagues can thrive and have a balanced lifestyle, further underpinning our operational resilience. This leads us to conclude that margins may come under some pressure, but encouragingly the strength of our recovery post Covid underlines our belief that customers truly cherish their weeks away in the sun and want to be properly looked after throughout their holiday experience.

Our 'Customer First' ethos runs deep throughout our company culture with 'People, Service, Profits' our guiding principles - great and attentive service is where we excel. In addition, our well-established truly variable duration holidays and wide ranging product portfolio which includes the All Inclusive Package - all in cost certainty and a wonderful product for challenging economic times - will provide customers with plenty of choice and flexibility to be able to tailor their holiday plans to meet their individual budgets. As a result, we remain confident that our Customers' eagerness to take their much valued and anticipated holidays will remain high.

Our long-term ambition remains to be the UK's Leading and Best Leisure Travel business . W ith our customer focused approach and Right Product for these Tougher Times, we are confident that as a financially strong and much trusted holiday provider, 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

24 November 2022

Business and Financial Performance

Customer Demand & Revenue

Following the reopening of international travel in early 2022, our Leisure Travel business has been able to operate to all its popular high-volume leisure destinations allowing us to provide our Customers with their well-deserved and eagerly anticipated Real Package Holidays from Jet2holidays(R).

Overall bookings, though a little later than normal, remained consistently strong. As a result, passenger numbers for the period increased by 632% to 11.20m (2021: 1.53m), with customers choosing our end-to-end package holiday product rising 755% to 3.76m (2021: 0.44m) and single sector passengers choosing our flight-only product growing by 431% to 3.82m (2021: 0.72m). Consequently, higher margin package holiday customers represented 65.9% of overall flown passengers (2021: 53.0%).

Pleasingly, average load factor achieved was 90.7% (2021: 57.3%) on a 361% increase in seat capacity to 12.35m (2021: 2.68m), underlining the popularity of our leisure travel product and the resurgence in consumer confidence to travel.

Flight-only ticket yield per passenger sector at GBP105.00 (2021: GBP73.27) was 43% higher than the prior year, due to changes in the mix of destinations flown, notably an increase to those in the Eastern Mediterranean, and strong consumer demand meaning fewer promotional offers were required.

The average price of a Jet2holidays package holiday increased 5% to GBP782 (2021: GBP748) reflecting inflationary increases in costs and favourable pricing driven by destination mix and robust consumer demand.

Non-Ticket Retail Revenue per passenger sector declined 17% to GBP25.79 (2021: GBP30.97) primarily due to early season product supply chain issues and resource constraints at Jet2.com's third party in-flight retail supplier which affected onboard product availability and consequently impacted in-flight retail revenues. Pleasingly, as we enter the Winter 2022/23 season this disruption has largely abated, and availability levels are now approaching the high standards our customers have come to expect and enjoy.

As a result, overall Group Revenue increased 730% to GBP3,567.6m (2021: GBP429.6m).

Net Operating Expenses

Higher levels of flying activity resulted in an associated 536% increase in direct operating expenses (including direct staff costs) to GBP2,654.9m (2021: GBP417.2m), significantly lower than the revenue growth, this despite the severe operational disruption experienced in mid-summer 2022 due to the lack of planning and investment by many airports and associated suppliers. This disruption caused flight delays in excess of three hours deemed eligible under EU261/2004, to be over 700% higher than 2019 and has resulted in significant delay and compensation costs in excess of GBP50.0m.

Further, GBP108.0m was invested in brand and direct marketing activity as the business ramped up operations post-pandemic and sought to optimise load factors for Summer 2022 and drive customer bookings for Winter 2022/23 and Summer 2023.

As a result, net operating expenses in total increased by 409% to GBP3,051.0m (2021: GBP600.0m).

Operating Profit

Overall Group operating profit was GBP516.6m (2021: GBP170.4m loss) which was also 42% ahead of 2019.

Net Financing Expense

Net financing expense (excluding Net FX revaluation losses) decreased by GBP13.2m to GBP12.1m (2021: GBP25.3m), with additional interest incurred on the GBP387.4m convertible bond issuance and GBP150.0m term loan, more than offset by finance income earned on the Group's higher average cash balances, which was further boosted by recent interest rate increases.

Group profit before foreign exchange revaluation & taxation

As a result, Group profit before foreign exchange revaluation and taxation increased to GBP505.0m (2021: GBP195.1m loss), which was also 44% ahead of 2019. Total profit for the period after taxation was GBP356.0m (2021: GBP163.5m loss).

Cash Flow & Liquidity

In the first half of the financial year, the Group generated cash from operating activities of GBP787.0m (2021: GBP248.4m) , primarily a result of significantly improved EBITDA together with working capital benefits from the increased operational activity.

Capital expenditure of GBP65.3m (2021: GBP60.6m) reflected pre-delivery payments made for the Group's Airbus A321 neo order, plus continued investment in the long-term maintenance of our existing aircraft fleet. The investment in the electrification of ground services equipment and other vehicles continues apace, as older less efficient models reach the end of their useful lives. In addition, as a consequence of our recent aircraft orders and to further underpin our growth ambitions, we took the opportunity to purchase premises at Cheadle, near Manchester Airport, which will become our second flight simulator training centre, building on the success of our first facility near Bradford which commenced operation in 2014. This new centre will provide a bespoke training facility for pilots, engineers and cabin crew and will continue to equip us with well-trained colleagues as we grow over the coming years.

Net cash used in financing activities was GBP138.7m (2021: GBP467.8m net cash generated), which included repayment of the existing GBP65.0m Revolving Credit Facility.

As a result, overall liquidity improved significantly with a total cash balance (including money market deposits) at the half year end of GBP2,830.7m, an increase of 39% (2021: GBP2,036.9m). Our 'Own Cash' position (excluding customer deposits) of GBP1,968.6m increased by 29% (2021: GBP1,524.3m).

Renegotiation of Revolving Credit Facility Agreement ("RCF")

Since the half year end, the Group has successfully renegotiated its RCF, welcoming one new financing partner, National Westminster Bank plc, alongside our three existing supportive relationship banks: Barclays Bank plc; HSBC UK Bank plc; and Lloyds Bank plc. The new RCF provides the Group with unsecured available facilities of up to GBP300m, an increase of GBP200m on its previous RCF. On signature and having considered the Group's current liquidity position and medium-term liquidity requirements, the Board decided to repay in full the Group's GBP150.0m term loan, which was due to mature in September 2023, with the new RCF remaining undrawn. Importantly, the new RCF will be sustainability-linked from April 2023, incorporating the Group's key climate metric - gCO(2) per passenger km aircraft fuel burn.

The strength of our balance sheet means the Group is well positioned to capitalise on the growth opportunities that we believe exist for our exciting business and also provides it with necessary financial resilience should circumstances become more challenging.

 
 Key Performance Indicators                    Half year       Half year        Half       Half year 
                                                   ended           ended    year end           ended 
                                            30 September    30 September      change    30 September 
                                                    2022            2021                        2019 
----------------------------------------  --------------  --------------  ----------  -------------- 
 Leisure Travel sector seats available 
  (capacity)                                      12.35m           2.68m        361%          10.82m 
========================================  ==============  ==============  ==========  ============== 
 Leisure Travel passenger sectors 
  flown                                           11.20m           1.53m        632%          10.07m 
========================================  ==============  ==============  ==========  ============== 
 Leisure Travel average load factor                90.7%           57.3%    33.4ppts           93.1% 
========================================  ==============  ==============  ==========  ============== 
 Flight-only passenger sectors flown               3.82m           0.72m        431%           4.75m 
========================================  ==============  ==============  ==========  ============== 
 Package holiday customers                         3.76m           0.44m        755%           2.71m 
========================================  ==============  ==============  ==========  ============== 
 Package holiday customers % of total 
  passenger sectors flown                          65.9%           53.0%    12.9ppts           52.8% 
========================================  ==============  ==============  ==========  ============== 
 Flight-only ticket yield per passenger        GBP105.00        GBP73.27         43%        GBP88.87 
  sector (excl. taxes) 
========================================  ==============  ==============  ==========  ============== 
 Average package holiday price                    GBP782          GBP748          5%          GBP702 
========================================  ==============  ==============  ==========  ============== 
 Non-ticket revenue per passenger               GBP25.79        GBP30.97       (17%)        GBP24.62 
  sector 
========================================  ==============  ==============  ==========  ============== 
 Advance sales made as at 30 September       GBP1,665.5m     GBP1,311.9m         27%     GBP1,206.3m 
----------------------------------------  --------------  --------------  ----------  -------------- 
 

Certain information contained in this announcement would have been deemed inside information as stipulated under the UK version of the EU Market Abuse Regulation (2014/596) which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended and supplemented from time to time, until the release of this announcement.

For further information, please contact:

 
 Jet2 plc                             Tel: 0113 239 7692 
  Philip Meeson, Executive Chairman 
 Gary Brown, Group Chief Financial 
  Officer 
 Cenkos Securities plc                Tel: 020 7397 8900 
  Nominated Adviser 
  Katy Birkin / Camilla Hume 
 Canaccord Genuity Limited            Tel: 020 7523 8000 
  Joint Broker 
  Adam James 
 
 Jefferies International Limited      Tel: 020 7029 8000 
  Joint Broker 
  Ed Matthews 
 Buchanan                                           Tel: 020 7466 5000 
  Financial PR 
  Richard Oldworth / Toto Berger 
 

Notes to Editors

 
  --   Jet2holidays is the UK's largest package holidays provider 
        to many Mediterranean and Canary Islands leisure destinations 
        and Jet2.com is the UK's third largest airline by number 
        of passengers flown. 
  --   Jet2 currently operates from 10 bases across the UK - London 
        Stansted, Manchester, Birmingham, Bristol, East Midlands, 
        Leeds Bradford, Edinburgh, Glasgow, Newcastle and Belfast 
        International. 
 

Jet2 plc

Condensed Consolidated Income Statement (Unaudited)

for the half year ended 30 September 2022

 
                                              Note       Half year       Half year        Year 
                                                             ended           ended       ended 
                                                      30 September    30 September    31 March 
                                                              2022            2021        2022 
                                                              GBPm            GBPm        GBPm 
-------------------------------------------  -----  --------------  --------------  ---------- 
 
 Revenue                                                   3,567.6           429.6     1,231.7 
 Net operating expenses                        6         (3,051.0)         (600.0)   (1,555.6) 
-------------------------------------------  -----  --------------  --------------  ---------- 
 Operating profit / (loss)                                   516.6         (170.4)     (323.9) 
 Finance income                                               20.5             1.7         5.1 
 Finance expense                                            (32.6)          (27.0)      (58.5) 
 Net FX revaluation losses                                  (54.3)          (10.7)      (12.6) 
-------------------------------------------  -----  --------------  --------------  ---------- 
 Net financing expense                                      (66.4)          (36.0)      (66.0) 
 Profit on disposal of property, 
  plant and equipment                                          0.5             0.6         1.1 
 Profit / (loss) before taxation                             450.7         (205.8)     (388.8) 
 Taxation                                      8            (94.7)            42.3        73.4 
 Profit / (loss) for the period 
  (all attributable to equity shareholders 
  of the Parent)                                             356.0         (163.5)     (315.4) 
-------------------------------------------  -----  --------------  --------------  ---------- 
 
 Earnings per share 
 - basic                                       7            165.9p         (76.2p)    (147.0p) 
 - diluted                                     7            150.8p         (76.2p)    (147.0p) 
-------------------------------------------  -----  --------------  --------------  ---------- 
 

Jet2 plc

Condensed Consolidated Statement of Comprehensive Income (Unaudited)

for the half year ended 30 September 2022

 
                                                     Half year       Half year        Year 
                                                         ended           ended       ended 
                                                  30 September    30 September    31 March 
                                                          2022            2021        2022 
                                                          GBPm            GBPm        GBPm 
----------------------------------------------  --------------  --------------  ---------- 
 
 Profit / (loss) for the period                          356.0         (163.5)     (315.4) 
 Other comprehensive income / (expense) 
----------------------------------------------  --------------  --------------  ---------- 
 Cash flow hedges: 
    Fair value gains                                     178.1            64.7       225.2 
    Net amount transferred to Consolidated 
     Income Statement                                  (139.2)            18.7        22.4 
    Cost of hedging reserve - changes in fair 
     value                                                 2.9             1.6       (8.0) 
    Related taxation charge                             (13.8)          (15.4)      (46.5) 
 Revaluation of foreign operations                         7.8             0.9           - 
                                                          35.8            70.5       193.1 
 Total comprehensive income / (expense) 
  for the period 
 
  (all attributable to equity shareholders 
  of the Parent)                                         391.8          (93.0)     (122.3) 
==============================================  ==============  ==============  ========== 
 

Jet2 plc

Condensed Consolidated Statement of Financial Position (Unaudited)

at 30 September 2022

 
                                      30 September   30 September   31 March 2022 
                                              2022           2021            GBPm 
                                              GBPm           GBPm 
                                                        Restated* 
 Non-current assets 
 Intangible assets                            26.8           26.8            26.8 
 Property, plant and equipment               867.2          843.9           845.2 
 Right-of-use assets                         535.0          464.2           491.9 
 Derivative financial instruments             32.9            9.5            20.5 
-----------------------------------  -------------  -------------  -------------- 
                                           1,461.9        1,344.4         1,384.4 
 ----------------------------------  -------------  -------------  -------------- 
 Current assets 
 Inventories                                  20.9            0.8             8.5 
 Trade and other receivables                 180.8          124.2           185.8 
 Derivative financial instruments            201.6           68.2           186.3 
 Money market deposits                     1,624.8          941.1         1,181.0 
 Cash and cash equivalents                 1,205.9        1,095.8         1,047.5 
                                           3,234.0        2,230.1         2,609.1 
 ----------------------------------  -------------  -------------  -------------- 
 Total assets                              4,695.9        3,574.5         3,993.5 
-----------------------------------  -------------  -------------  -------------- 
 Current liabilities 
 Trade and other payables                    660.7          231.3           217.8 
 Deferred revenue                            877.7          516.2         1,173.4 
 Borrowings                                  263.2          332.3           134.5 
 Lease liabilities                            95.9           73.4            74.8 
 Provisions and liabilities                   94.3           49.3            41.8 
 Derivative financial instruments             24.8           33.0            39.6 
                                           2,016.6        1,235.5         1,681.9 
 ----------------------------------  -------------  -------------  -------------- 
 Non-current liabilities 
 Deferred revenue                              7.7            9.3            15.7 
 Borrowings                                  669.0          881.6           857.2 
 Lease liabilities                           556.8          480.9           503.7 
 Provisions and liabilities                   35.3           20.4            22.3 
 Derivative financial instruments              3.8           13.3             3.5 
 Deferred taxation                           114.4           10.9            12.6 
-----------------------------------  -------------  -------------  -------------- 
                                           1,387.0        1,416.4         1,415.0 
 ----------------------------------  -------------  -------------  -------------- 
 Total liabilities                         3,403.6        2,651.9         3,096.9 
-----------------------------------  -------------  -------------  -------------- 
 Net assets                                1,292.3          922.6           896.6 
===================================  =============  =============  ============== 
 Shareholders' equity 
 Share capital                                 2.7            2.7             2.7 
 Share premium                                19.8           19.8            19.8 
 Cash flow hedging reserve                   181.1           24.1           155.2 
 Cost of hedging reserve                     (3.4)            2.1           (5.5) 
 Other reserves                               59.1           52.2            51.3 
 Retained earnings                         1,033.0          821.7           673.1 
 Total shareholders' equity                1,292.3          922.6           896.6 
===================================  =============  =============  ============== 
 

*The ageing of Provisions and liabilities for the period ended 30 September 2021 have been restated as detailed in Note 11

Jet2 plc

Condensed Consolidated Statement of Cash Flows (Unaudited)

for the half year ended 30 September 2022

 
                                                      Half year         Half year   Year ended 
                                                          ended             ended     31 March 
                                                   30 September      30 September         2022 
                                                           2022              2021         GBPm 
                                                           GBPm              GBPm 
-----------------------------------------------  --------------  ----------------  ----------- 
 Profit / (loss) before taxation                          450.7           (205.8)      (388.8) 
    Net financing expense (including Net FX 
     revaluation losses)                                   66.4              36.0         66.0 
    Hedge ineffectiveness                                     -               0.8          0.8 
    Depreciation                                           98.1              81.6        158.3 
    Profit on disposal of property, plant and 
     equipment                                            (0.5)             (0.6)        (1.1) 
    Equity settled share-based payments                     3.9                 -          3.3 
 Operating cash flows before movements 
  in working capital                                      618.6            (88.0)      (161.5) 
    (Increase) / decrease in inventories                 (12.4)               0.2        (7.5) 
    Decrease / (increase) in trade and other 
     receivables                                            5.0               4.1       (35.5) 
    Increase in trade and other payables                  438.7             161.2        151.8 
    (Decrease) / increase in deferred revenue           (303.7)             203.1        866.7 
    Increase / (decrease) in provisions and 
     liabilities                                           52.8               2.6        (9.5) 
    Payment on settlement of derivatives                      -            (15.5)       (15.5) 
 Cash generated from operations                           799.0             267.7        789.0 
    Interest received                                      20.5               1.7          5.1 
    Interest paid                                        (24.3)            (21.0)       (43.5) 
    Income taxes (paid) / refunded                        (8.2)                 -          0.4 
 Net cash generated from operating activities             787.0             248.4        751.0 
-----------------------------------------------  --------------  ----------------  ----------- 
 Cash flows used in investing activities 
    Purchase of property, plant and equipment            (65.0)            (60.6)      (107.9) 
    Purchase of right-of-use assets                       (0.3)                 -        (0.5) 
    Proceeds from sale of property, plant and 
     equipment                                              0.6               0.6          1.1 
    Net increase in money market deposits               (443.8)           (941.1)    (1,181.0) 
 Net cash used in investing activities                  (508.5)         (1,001.1)    (1,288.3) 
-----------------------------------------------  --------------  ----------------  ----------- 
 Cash flows (used in) / generated from 
  financing activities 
    Repayment of borrowings                             (100.4)            (25.2)      (259.5) 
    New loans advanced                                        -             147.9        147.9 
    Payment of lease liabilities                         (38.3)            (35.0)       (67.5) 
    Proceeds on issue of convertible bonds                    -             380.1        380.1 
 Net cash (used in) / generated from financing 
  activities                                            (138.7)             467.8        201.0 
-----------------------------------------------  --------------  ----------------  ----------- 
 Net increase / (decrease) in cash in the 
  period                                                  139.8           (284.9)      (336.3) 
 Cash and cash equivalents at beginning 
  of period                                             1,047.5           1,379.0      1,379.0 
 Effect of foreign exchange rate changes                   18.6               1.7          4.8 
-----------------------------------------------  --------------  ----------------  ----------- 
 Cash and cash equivalents at end of period             1,205.9           1,095.8      1,047.5 
===============================================  ==============  ================  =========== 
 

Jet2 plc

Condensed Consolidated Statement of Changes in Equity (Unaudited)

for the half year ended 30 September 2022

 
                               Share      Share       Cash          Cost       Other    Retained            Total 
                             capital    premium       flow    of hedging    reserves    earnings    shareholders' 
                                                   hedging       reserve                                   equity 
                                                   reserve 
                                GBPm       GBPm       GBPm          GBPm        GBPm        GBPm             GBPm 
-------------------------  ---------  ---------  ---------  ------------  ----------  ----------  --------------- 
 Balance at 31 March 
  2021                           2.7       19.8     (44.2)           0.8       (0.1)       985.2            964.2 
 
 Total comprehensive 
  expense                          -          -       68.3           1.3         0.9     (163.5)           (93.0) 
 Issue of convertible 
  bonds(1)                         -          -          -             -        51.4           -             51.4 
 
 Balance at 30 September 
  2021                           2.7       19.8       24.1           2.1        52.2       821.7            922.6 
 
 Total comprehensive 
  expense                          -          -      131.1         (7.6)       (0.9)     (151.9)           (29.3) 
 Share-based payments              -          -          -             -           -         3.3              3.3 
 
 Balance at 31 March 
  2022                           2.7       19.8      155.2         (5.5)        51.3       673.1            896.6 
 
 Total comprehensive 
  income                           -          -       25.9           2.1         7.8       356.0            391.8 
 Share-based payments              -          -          -             -           -         3.9              3.9 
 
 Balance at 30 September 
  2022                           2.7       19.8      181.1         (3.4)        59.1     1,033.0          1,292.3 
=========================  =========  =========  =========  ============  ==========  ==========  =============== 
 

(1) In June 2021, senior unsecured convertible bonds were issued generating gross proceeds of GBP387.4m. The equity component of these bonds was valued at GBP51.4m and recognised in other reserves. The remaining balance held in other reserves relates to foreign exchange translation differences arising on revaluation of non-sterling functional currency subsidiaries of the Group, which totalled GBP7.7m at 30 September 2022.

Jet2 plc

Notes to the consolidated interim report

for the half year ended 30 September 2022 (Unaudited)

   1.         General information 

Jet2 plc is a public limited company incorporated and domiciled in England and Wales. The Company's ordinary shares are traded on the AIM market of the London Stock Exchange. The address of its registered office is Low Fare Finder House, Leeds Bradford Airport, Leeds, LS19 7TU.

The Group's interim financial report consolidates the financial statements of Jet2 plc and its subsidiaries.

This interim report has been prepared and approved by the Directors in accordance with UK-adopted international accounting standards and applicable law ("Adopted IFRS"). It does not fully comply with IAS 34 - Interim Financial Reporting, which is not currently required to be applied by AIM companies.

   2.         Accounting policies 

Basis of preparation of the interim report

This unaudited consolidated interim financial report for the half year ended 30 September 2022 does not constitute statutory accounts as defined in s435 of the Companies Act 2006. The financial statements for the year ended 31 March 2022 were prepared in accordance with UK-adopted international accounting standards and applicable law and have been delivered to the Registrar of Companies. The report of the auditor on those financial statements was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under s495(3) nor (4) of the Companies Act 2006.

The interim financial report has been prepared under the historical cost convention except for all derivative financial instruments, which have been measured at fair value. The accounting policies applied within this interim report are consistent with those detailed in the Annual Report & Accounts for the year ended 31 March 2022.

The Group's interim financial report is presented in pounds sterling and all values are rounded to the nearest GBP100,000 except where indicated otherwise.

Going concern

The Directors have prepared financial forecasts for the Group, comprising profit before and after taxation, balance sheets and projected cash flows through to 31 March 2025.

For the purpose of assessing the appropriateness of the preparation of the Group's interim financial report on a going concern basis, two financial forecast scenarios have been pr epared for the 12-month period following approval of these financial statements :

 
            --   A base case which assumes a full unhindered Summer 2023 flying 
                  programme, utilising an aircraft fleet of 112 at average load 
                  factors above 90%, although at lower gross profit margins than 
                  Summer 2022 to reflect rising fuel, carbon and other associated 
                  inflationary cost increases that may not be fully passed onto 
                  consumers; and 
            --   A downside scenario assuming reduced consumer demand resulting 
                  in materially lower average load factors, but with no restrictions 
                  on flying to any of the Group's destinations. 
 

The forecasts consider the current cash position, which is after the early repayment of the GBP150.0m term loan in October 2022, and an assessment of the principal areas of risk and uncertainty, paying particular attention to the impact of the current UK macro-economic environment and 'cost of living' pressures on our customers.

In addition to forecasting the cost base of the Group, both scenarios incorporated the funding of future aircraft deliveries with our well-established aircraft financing partners, and no mitigating actions taken to defer uncommitted capital expenditure.

The Directors concluded that given the combination of a closing cash balance (including money market deposits) of GBP2,830.7m at 30 September 2022, together with the forecast monthly cash utilisation that, under both scenarios, the Group would have sufficient liquidity throughout a period of 12 months from the date of approval of this interim financial report. In addition, the Group is forecast to meet its banking covenants at 31 March 2023 and 30 September 2023 under both scenarios.

As a result, 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 interim financial report. For this reason, they continue to adopt the going concern basis in preparing the unaudited interim report for the half year ended 30 September 2022.

   3.         New accounting standards 

The following revision to accounting standards became effective from January 2021.

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 - Interest Rate Benchmark Reform Phase 2

The Group renegotiated the terms of its LIBOR financing agreements to Sterling Overnight Index Average Rate (SONIA) during the year to 31 March 2022.

The Group continues to engage with those financing partners to which it has US LIBOR exposures on its aircraft financing and any associated floating-to-fixed interest rate swaps, to transition these agreements to the Secured Overnight Financing Rate ("SOFR") ahead of the 30 June 2023 deadline. The impact of this is not expected to be material.

   4.         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 / (loss) before FX revaluation and taxation

Profit / (loss) 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.

Profit / (loss) before FX revaluation and taxation is calculated as below:

 
                                              Half year       Half year   Year ended 
                                                  ended           ended     31 March 
                                           30 September    30 September         2022 
                                                   2022            2021 
                                                   GBPm            GBPm         GBPm 
                                         --------------  --------------  ----------- 
 
 Profit / (loss) before taxation                  450.7         (205.8)      (388.8) 
 Net FX revaluation losses                         54.3            10.7         12.6 
 Profit / (loss) before FX revaluation 
  and taxation                                    505.0         (195.1)      (376.2) 
                                         ==============  ==============  =========== 
 

'Own Cash'

'Own Cash' comprises cash and cash equivalents and money market deposits and excludes advance customer deposits. It is included as an alternative measure in order to aid users in understanding the liquidity of the Group.

 
                                    Half year       Half year   Year ended 
                                        ended           ended     31 March 
                                 30 September    30 September         2022 
                                         2022            2021 
                                         GBPm            GBPm         GBPm 
                               --------------  --------------  ----------- 
 
 Cash and cash equivalents            1,205.9         1,095.8      1,047.5 
 Money market deposits                1,624.8           941.1      1,181.0 
 Deferred revenue                     (885.4)         (525.5)    (1,189.1) 
 Trade and other receivables             23.3            18.2         44.4 
 Trade and other payables                   -           (5.3)            - 
                               --------------  -------------- 
 'Own Cash'                           1,968.6         1,524.3      1,083.8 
                               ==============  ==============  =========== 
 

Trade and other receivables relates to invoicing of amounts due from travel agents in respect of package holiday deposits and balance payments.

Trade and other payables relates to refund credit notes issued and cash refunds not yet paid out for flights and holidays cancelled prior to the period end.

   5.         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 ("CODM").

The CODM is responsible for the overall resource allocation and performance assessment of the Group. The Board of Directors approves major capital expenditure, assesses the performance of the Group and also determines key financing decisions. Consequently, the Board of Directors is considered to be the CODM.

The information presented to the CODM for the purpose of resource allocation and assessment of the Group's performance relates to its Leisure Travel segment as shown in the Consolidated Income Statement.

The Leisure Travel business specialises in offering package holidays by its ATOL licensed provider, Jet2holidays, to leisure destinations in the Mediterranean, the Canary Islands and to European Leisure Cities, and scheduled holiday flights by its airline, Jet2.com. Resource allocation decisions are based on the entire route network and the deployment of its entire aircraft fleet. All Jet2holidays customers fly on Jet2.com flights, and therefore these segments are inextricably linked and represent the only segment within the Group.

Revenue is principally generated from within the UK, the Group's country of domicile. No customer represents more than 10% of the Group's revenue.

   6.         Net operating expenses 
 
                                            Half year    Half year   Year ended 
                                             ended 30     ended 30     31 March 
                                            September    September         2022 
                                                 2022         2021 
                                                 GBPm         GBPm         GBPm 
 Direct operating costs: 
    Accommodation                             1,415.6        170.4        473.5 
    Fuel                                        324.5         42.5        132.8 
    Landing, navigation and third-party 
     handling                                   271.4         47.6        139.5 
    Agent commission                            103.9         10.1         29.5 
    Carbon                                       57.3          3.4         11.0 
    Aircraft rentals                             53.9            -          0.6 
    Maintenance                                  52.1         17.4         38.7 
    In-flight cost of sales                      45.0          9.4         28.9 
    Other direct operating costs                181.0         30.1         53.6 
 Staff costs including agency staff             288.1        127.2        313.2 
 Depreciation of property, plant 
  and equipment                                  65.9         56.2        105.2 
 Depreciation of right-of-use assets             32.2         25.4         53.1 
 Other operating charges                        160.1         60.3        176.0 
 Total net operating expenses                 3,051.0        600.0      1,555.6 
                                          ===========  ===========  =========== 
 
   7.         Earnings per share 

Basic earnings per share is calculated by dividing the profit / (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period.

Diluted earnings per share is calculated by dividing the profit / (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period, adjusted for the effects of potentially dilutive share options and Deferred Awards, along with the potential conversion of the convertible bonds to ordinary shares at maturity in June 2026. In accordance with IAS 33, these were not included in the calculation of diluted earnings per share for the half year ended 30 September 2021, as they were anti-dilutive.

 
                                      Half year ended 30 September            Half year ended 30 September 
                                                              2022                                    2021 
                              Earnings          Weighted       EPS    Earnings          Weighted         EPS 
                                          average number                          average number 
                                               of shares                               of shares 
                                  GBPm          millions     Pence        GBPm          millions       Pence 
 Basic EPS 
 Profit / (loss) 
  attributable 
  to ordinary shareholders       356.0             214.6     165.9     (163.5)             214.6      (76.2) 
---------------------------  ---------  ----------------  --------   ---------  ----------------  ---------- 
 Effect of dilutive 
  instruments 
 Share options 
  and Deferred 
  Awards                             -               4.6     (3.5)           -                 -           - 
 Convertible bonds                 7.0              21.5    (11.6)           -                 -           - 
 Diluted EPS                     363.0             240.7     150.8     (163.5)             214.6      (76.2) 
---------------------------  ---------  ----------------  --------   ---------  ----------------  ---------- 
 
 
   8.         Taxation 

The taxation charge for the period of GBP94.7m (2021: GBP42.3m credit) reflects an estimated effective tax rate of approximately 21% (2021: 21%).

   9.         Dividends 

The declared interim dividend of 3.0p per share (2021: GBPnil) will be paid out of the Company's available distributable reserves on 3 February 2023, to shareholders on the register at 30 December 2022, with the ex-dividend date being 29 December 2022. In accordance with IAS 1, dividends are recorded only when paid and are shown as a movement in equity rather than as a charge to the Consolidated Income Statement.

   10.       Contingent liabilities 

The Group has issued various guarantees in the ordinary course of business, none of which are expected to lead to a financial gain or loss.

   11.       Restatement of prior year interim financial report 

The Group has restated its Provisions and liabilities to better reflect the timing of when its leased aircraft maintenance obligations fall due, having previously recognised the full balance as a current liability.

Provisions totalling GBP20.4m previously reported as current liabilities have been restated and presented as non-current liabilities. This has resulted in current provisions reducing from GBP69.7m to GBP49.3m at 30 September 2021 and non-current provisions increasing from GBPnil to GBP20.4m. Consequently, total current liabilities decreased from GBP1,255.9m to GBP1,235.5m and total non-current liabilities increased from GBP1,396.0m to GBP1,416.4m.

   12.       Other matters 

This report will be posted on the Group's website, www.jet2plc.co m and copies are available from the Group Company Secretary at the registered office address: Low Fare Finder House, Leeds Bradford Airport, Leeds, LS19 7TU.

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