Jet2’s parent company has seen its shares plunge on the London Stock Exchange after warning about “less buoyant” holiday sales.
Dart Group, which owns the Leeds-based airline and tour operator, has issued a profits warning today as it admitted that pricing in the leisure market has been “weak”.
The announcement sent Dart’s shares plunging by up to 29% from yesterday’s closing price of £2.51 per share to as low as £1.78 in early trading in London.
The company warned that demand for holidays this summer has been “less buoyant than we hoped for” despite the company enjoying a 30% rise in operating profits during its last financial year.
Chairman Philip Meeson said: “In relation to the current financial year, we are finding demand for leisure travel, this summer, to the markets we serve, less buoyant than we would have hoped for and market pricing weak.
“This may be due to the weather, the World Cup, or because the financial recovery hasn’t yet taken hold in our home territory, the north of the UK.
“Unfortunately, therefore, in view of the current visibility we have of our remaining summer 2014 forward bookings, we now expect the current year operating profit outturn to be lower than previous market expectations.”
The profit warning overshadowed Dart’s results for the financial year to the end of March 2014, which saw it make an operating profit of £49.2 million - compared to a profit of £37.9 million in 2013.
The company said that Jet2holidays had “almost doubled” its number of package holiday customers from 417,390 last year to 830,019 in 2014. This helped Jet2holidays to increase its operating profit by 122% to £14.4 million on the back of a 103% rise in turnover to £496.2 million year-on-year.
Jet2.com, the group’s airline, also increased turnover by 16% to £643.1 million while operating profit rose by 17% to £31.2 million for the carrier. Although pre-tax profit for Jet2.com actually fell 18.4% to £23.9 million year-on-year due to a drop in the value of its US dollar cash holdings and “ineffective” hedging contracts.
