Dart Group flies lower in face of Brexit and cost pressures

Jet2 airline owner Dart Group’s shares stumbled on Thursday after the outift told investors that the second half will bring “increased losses” as cost pressures take their toll.

Philip Meeson, executive chairman of Dart said cost pressures such as fuel and other operating charges, plus the continued investment in products and operations including that required to retain and attract colleagues, are emerging headwinds for the AIM traded company.

“This, coupled with the overall uncertain UK economic outlook particularly related to Brexit and how it may impact on consumer spending, means we remain unclear how demand will develop in the medium term,” said Meeson.

However, in the six months ended 30 September profit before tax jumped by 56% to £337.4m and revenue rose by 36% to £2.25bn following a 25% increase in passenger numbers to 8.93m

Furthermore, the travel and leisure business enjoyed a “particularly strong season” as average ticket prices were up by 17% to £88.02 and average costs for Jet2’s higher margin package holidays were 7% higher at £689.

Meanwhile, revenue from the distribution & logistics business also grew by 7% to £88.9m after new contract wins.

Cash and cash equivalents stood at £912.4m at 30 September, up from the £485.9m registered at the same point last year, and proposed an interim dividend of 2.8p per share, up from 1.5p.

“On the assumption that the UK Government secures a pragmatic and balanced Brexit agreement with the EU, the outlook remains bright and we continue to have confidence in the resilience of both our Leisure Travel and Distribution & Logistics businesses,” said Meeson.

Dart Group’s shares were down 12.81% at 857.50p at 0940 GMT.