DTG.L Regulatory News (DTG)

23 Nov 2006 07:01

Dart Group PLC23 November 2006 DART GROUP PLC Interim Results for the Six Months Ended 30 September 2006 Dart Group PLC, the aviation and distribution group, announces its interimresults for the six months ended 30 September 2006 CHAIRMAN'S STATEMENT I am pleased to report on the Group's trading for the six months ended 30September 2006. Profit before tax, goodwill amortisation and exceptional itemsamounted to £22.1m (2005 restated: £14.7m) whilst profit before tax but aftergoodwill amortisation and exceptional items was £24.0m (2005 restated: £18.1m).The usual pattern of seasonal profitability for the Group is likely to berepeated this year, with Jet2.com being profitable in the summer and loss makingin the winter. The Group has material exposures to both the US Dollar exchange rate and theprice of aviation fuel. The Group's treasury operations manage the risks ofthese exposures. In accordance with our current treasury policy, both of theseexposures have been fully hedged for the current financial year. For the yearending 31 March 2008, 76% of the forecast US Dollar exposure has been hedgedtogether with 57% of the jet fuel tonnage. The Group completed the sale of its non-core Channel Islands' logistics businesson 3 July 2006. The exceptional credit of £2.2m relates to surplus of proceedsover book cost. Capital expenditure in the first half amounted to £26.0m (2005 : £22.7m) andprimarily related to the purchase of two Boeing 757-200 aircraft. Net debt at 30September 2006 was £5.8m (2005 : £7.7m), representing gearing of 7.8 % (2005 :13%). The Board is pleased to declare an increased interim dividend of 0.65p per share(2005 : 0.5625p), an increase of 15.6%. The dividend will be paid on 4 January2007 to shareholders on the register as at 1 December 2006. Jet2.com Jet2.com, the low-cost airline, has had an encouraging summer's business fromits six Northern bases which, whilst serving separate catchment areas, haveconsiderable synergies in terms of marketing and operations. Predominately aleisure-based airline, the company is benefiting from its customers' growingpropensity to fly on flexible scheduled services rather than with traditionalcharter carriers for their leisure needs. The owned aircraft fleet consists of 21 Boeing 737-300s and five Boeing757-200s. Additional capacity is leased in as required. Six of the Boeing737-300s are "Quick Change" versions enabling them to also operate night mailservices for Royal Mail. We plan to expand both fleets during the winter months in order to serve theincreased range of destinations the company has announced for next summer. Theseinclude seven new routes from Manchester, five each from Leeds-Bradford, Belfastand Newcastle, four from Blackpool and two from Edinburgh. Several of these areto existing destinations already served from other bases and their introductionwill considerably increase the choice of city breaks and sun offered from eachbase and enhance the company's overall marketing presence. Full details can befound on the company's website, www.jet2.com. Ancillary revenue from associated commercial services such as onboard sales andhotels, car hire, etc., booked through our sales website have shown good growthin spend per passenger during the year and major efforts are being made to buildon these and to develop other revenue opportunities. Our strategy continues to be to concentrate and grow Jet2.com's operations inthe North, building familiarity with the brand and delivering an attractive,low-cost service. This is a competitive market but, with innovation, we believethere are many future opportunities. Fowler Welch-Coolchain The Group's logistics company, Fowler Welch-Coolchain, made further progress inthe first half with increased sales and profits. Fowler Welch-Coolchainprimarily provides an integrated supply chain solution to supermarkets and theirsuppliers, food manufacturers, growers and importers. Capabilities include bothchilled and ambient distribution together with warehousing and pick to orderoperations. The recently acquired business and assets of R F Fielding Cheshire Limited (InAdministration), which specialises in ambient distribution, made a small netcontribution to profits from a combination of network synergies, cost reductionsand new customer wins. On 4 September 2006 an 11 acre freehold property was acquired in North EastEngland. Currently, the property is being partially fitted out with chilledstorage and loading docks and, when complete, the total cost will be in theorder of £5.25m. These facilities will enable the business to further grow itsoperations out of this region as the previous property was too small to supportgrowth. The business' warehousing and picking operations continue to expand, with ourTeynham, Kent site functioning at near capacity and a substantial operation being undertaken at Spalding for Bernard Matthews Foods Limited, with whom a five-year contract has just been signed. OutlookAfter an encouraging first half, we remain optimistic for a successful outcometo the full year. Philip Meeson,Chairman 23 November 2006www.dartgroup.co.uk Enquiries: Philip Meeson, Chairman Mobile: 07785 258666Mike Forder, Group Finance Director Mobile: 07721 865850 UNAUDITED INTERIM CONSOLIDATED RESULTSfor the half year to 30 September 2006 Note Half Year to Half Year to Half Year to Half Year to Half Year to Half Year to Year to 31 Year to 31 Year to 31 30 September 30 September 30 September 30 September 30 September 30 September March 2006 March 2006 March 2006 2006 2006 2006 2005 2005 2005 (audited) (audited) (audited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) before exceptional Total Before Exceptional Total Before exceptional Total exceptional items(restated) exceptional items exceptional items (restated) items items items (restated) (restated) £m £m £m £m £m £m £m £m £m -------- -------- -------- -------- -------- -------- -------- -------- -------- Turnover - continuingoperations 198.6 - 198.6 168.7 - 168.7 298.6 - 298.6- discontinued operations 3.2 - 3.2 15.6 - 15.6 21.0 - 21.0 ------ -------- -------- --------- -------- -------- -------- -------- -------- 2 201.8 - 201.8 184.3 - 184.3 319.6 - 319.6 ------ -------- -------- -------- -------- -------- -------- -------- --------Net operating (178.4) - (178.4) (169.2) - (169.2) (305.6) (6.2) (311.8)expenses,excludingamortisationof goodwill Amortisationof goodwill (0.3) - (0.3) (0.3) - (0.3) (0.5) - (0.5) Net operating (178.7) - (178.7) (169.5) - (169.5) (306.1) (6.2) (312.3)expenses ------ ------- ------- ------- -------- ------- ------- -------- ------- OperatingProfit - continuingoperations 23.0 - 23.0 13.8 - 13.8 12.4 (6.2) 6.2 -discontinued operations 0.1 - 0.1 1.0 - 1.0 1.1 - 1.1 -------- -------- -------- -------- -------- -------- -------- ------- -------- 23.1 - 23.1 14.8 - 14.8 13.5 (6.2) 7.3 -------- -------- -------- -------- -------- -------- -------- ------- --------Profit ondisposal ofdiscontinuedoperations - 2.2 2.2 - 3.7 3.7 - 3.7 3.7Profit ondisposal offixed assets - - - - - - - 3.3 3.3 -------- -------- -------- -------- -------- -------- -------- -------- --------Net interest (payable) /receivable 3 (1.3) - (1.3) (0.4) - (0.4) 0.5 - 0.5 -------- -------- -------- -------- -------- -------- -------- -------- -------- Profit onordinaryactivitiesbeforetaxation 21.8 2.2 24.0 14.4 3.7 18.1 14.0 0.8 14.8 Taxation (7.0) (0.2) (7.2) (4.7) - (4.7) (4.7) 0.9 (3.8) -------- -------- -------- -------- -------- -------- -------- -------- --------Profit forthe period 14.8 2.0 16.8 9.7 3.7 13.4 9.3 1.7 11.0 -------- -------- -------- -------- -------- -------- -------- -------- -------- Note Half Year to Half Year to Half Year to Half Year to Year to 31 Year to 31 30 September 30 September 30 September 30 September March 2006 March 2006 2006 2006 2005 2005 (unaudited) (unaudited) (unaudited) (unaudited) (audited) (audited) Before Total Before Total Before Total exceptional (restated) exceptional exceptional (restated) items items items (restated) (restated) ------------------------------------------------------------------------------------------------------------------------ Earnings per share - total - basic 10.60p 12.07p 7.09p 9.75p 6.75p 7.95p- diluted 10.51p 11.96p 7.03p 9.67p 6.70p 7.89p Earnings per share - continuing operations - basic 10.48p 10.48p 6.45p 6.45p 6.44p 4.98p- diluted 10.39p 10.39p 6.40p 6.40p 6.40p 4.95p Earnings per share - discontinued operations - basic 0.12p 1.58p 0.64p 3.30p 0.31p 2.97p- diluted 0.11p 1.57p 0.63p 3.27p 0.31p 2.95p STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES for the half year to 30 September 2006 Half Year to Half Year to Year to 31 30 September 30 September March 2006 2006 2005 (unaudited) (unaudited) (audited) Total Total Total (restated) (restated) £m £m £m ---------------------------------------Profit for the period 16.8 13.4 11.0 ---------------------------------------Total recognised gains and losses relating to the period 16.8 13.4 11.0 ======== =======Prior year adjustment - FRS 20 Share based payment expense (note 1) (0.3) --------Total recognised gains and losses since previous annual report 16.5 ======== CONSOLIDATED BALANCE SHEETat 30 September 2006 Note 30 September 30 September 31 March 2006 2005 2006 (unaudited) (unaudited) (audited) (restated) (restated) £m £m £m --------- ---------- -------- Fixed assets 6.5 7.0 6.8Intangible assetsTangible assets 143.6 112.7 131.5 --------- ---------- -------- 150.1 119.7 138.3 --------- ---------- --------Current assetsStock 6.5 5.8 7.5Debtors 26.1 25.5 23.8Cash at bank and in hand 12.7 13.2 26.0 --------- ---------- -------- 45.3 44.5 57.3Current liabilitiesCreditors: amounts fallingdue within one year (91.4) (78.0) (98.6) --------- ---------- --------Net current liabilities (46.1) (33.5) (41.3) --------- ---------- --------Total assets less currentliabilities 104.0 86.2 97.0 Creditors: amounts fallingdue after more than one year (16.4) (18.1) (28.0) Provisions for liabilities andcharges (12.9) (6.2) (9.7) --------- ---------- --------Net assets 74.7 61.9 59.3 --------- ---------- --------Capital and reservesCalled up share capital 1.8 1.7 1.7Share premium account 8.8 8.1 8.6Profit and loss account 5 64.1 52.1 49.0 --------- ---------- --------Shareholders' funds - equityinterests 6 74.7 61.9 59.3 --------- ---------- -------- CONSOLIDATED CASH FLOW STATEMENTfor the half year to 30 September 2006 Note Half year to Half year to Year to 30 September 30 September 31 March 2006 2005 2006 (unaudited) (unaudited) (audited) £m £m £m --------- --------- --------- Net cash inflow from operatingactivities 7 23.8 16.4 41.0 ---------- --------- ---------Returns on investment andservicing of financeInterest paid: bank and other loans (0.7) (0.6) (1.9)Interest received: bank 0.3 0.2 0.3 ---------- --------- --------- (0.4) (0.4) (1.6) ---------- --------- ---------TaxationCorporation and overseas tax paid (1.2) (5.6) (5.2) ---------- --------- ---------Capital expenditure and financial investment Purchase of tangible fixed assets (26.0) (22.7) (48.7)Disposal of tangible fixed assets 2.2 - 3.2 ---------- --------- --------- (23.8) (22.7) (45.5) ---------- --------- ---------Acquisitions and disposals 4Proceeds from disposal of discontinued operations (net ofdisposal costs) 3.8 4.9 4.9 Net cash balances leaving theGroup with disposal ofdiscontinued operations - (0.9) (0.9) ---------- --------- --------- 3.8 4.0 4.0 ---------- --------- ---------Equity dividends paid (1.8) (1.6) (2.4) ---------- --------- ---------Cash inflow / (outflow) before financing 0.4 (9.9) (9.7) ---------- --------- ---------FinancingOrdinary share capital issued 0.2 0.1 0.6Other loans repaid (13.0) (4.4) (14.2)Other loans advanced - - 20.4 ---------- --------- --------- (12.8) (4.3) 6.8 ---------- --------- ---------(Decrease) in cash in theperiod (12.4) (14.2) (2.9) ---------- --------- --------- NOTES TO THE INTERIM RESULTSat 30 September 2006 1. Accounting Policies The accounting policies adopted by the Group are consistent with those disclosedin the Group's financial statements for the year ended 31 March 2006 except forthe adoption and impact of FRS 20. FRS 20: Share-based PaymentThe fair value of employee share option plans is measured at the date of grantof the option using a binomial valuation model. The resulting cost, as adjustedfor the expected and actual level of vesting of the options, is charged toincome over the period in which the options vest. At each balance sheet datebefore vesting the cumulative expenses is calculated, representing the extent towhich the vesting period has expired and management's best estimate of theachievement or otherwise of non-market conditions, of the number of equityinstruments that will ultimately vest. Cumulative expense since the previousbalance sheet date is recognised in the income statement with a correspondingentry in reserves. The Group has taken advantage of the transitional provisionsof FRS 20 in respect of the fair value of equity settled awards so as to applyFRS 20 only to those equity-settled awards granted after 7 November 2002 thathad not vested before 1 January 2006. The fair value of equity-settled share options granted is estimated as at thedate of grant using a binomial valuation model, taking into account the termsand conditions upon which the options were granted. The following table liststhe inputs to the models for the options granted in the year: Half year to 30 September 2006 Dividend yield 1.8%Expected share price volatility 33%Historical volatility 33%Risk-free interest rate 4.46%Expected life of options 10 yearsWeighted average share price 55p The expected life of the options is based on historical data and is notnecessarily indicative of exercise patterns that may occur. The expectedvolatility reflects the assumption that the historical volatility is indicativeof future trends, which may also not necessarily be the actual outcome. No otherfeatures of options grant were incorporated into the measurement of fair value. The share-based payment charge has been recorded in the income statement asfollows: Half year to Half year to Year to 30 September 30 September 31 March 2006 2005 2006 (unaudited) (unaudited) (audited) £m £m £m - Employee costs 0.1 0.1 0.2 ---------- --------- --------2. Turnover Half year to Half year to Year to 30 September 30 September 31 March 2006 2005 2006 (unaudited) (unaudited) (audited) £m £m £mDistribution --------- --------- -------- continuing operations 52.9 49.1 104.2- discontinued operations (see note 4) 3.2 6.1 11.5 Aviation - continuing operations 145.7 119.6 194.4- discontinued operations - 9.5 9.5 --------- --------- ------- 201.8 184.3 319.6 --------- --------- -------Turnover arising:Continuing operationsWithin the United Kingdom and the Channel Islands 93.2 92.3 173.3Between the United Kingdom and Mainland Europe 105.4 76.4 125.3 Discontinued operationsWithin the United Kingdom and the Channel Islands 3.2 15.2 20.6Within the Far East - 0.4 0.4 --------- --------- ------- 201.8 184.3 319.6 --------- --------- ------- Analyses of profit before taxation and net assets between the different segmentsof the Group are not given as, in the opinion of the directors, such analyseswould be seriously prejudicial to the commercial interests of the Group. 3. Net interest and currency (losses)/gains (payable) / receivable Half year to Half year to Year to 30 September 30 September 31 March 2006 2005 2006 (unaudited) (unaudited) (audited) £m £m £m --------- --------- -------- On other loans (0.9) (0.6) (1.5)Other interest payable - - (0.6) --------- --------- -------- (0.9) (0.6) (2.1)Interest receivable 0.3 0.2 0.3Interest payable capitalised withinfixed assets 0.2 - 0.3Foreign exchange (loss) / gain (0.9) - 2.0 --------- --------- -------- (1.3) (0.4) 0.5 --------- --------- --------4. Exceptional items Half year to Half year to Year to 30 September 30 September 31 March 2006 2005 2006 (unaudited) (unaudited) (audited) £m £m £m Operating itemsRe-organisation costs - - (2.2)A300 closure costs - - (0.7)Impairment of fixed assets - - (3.3) Profit on disposal of investments and fixed assetsProfit on disposal of discontinued operations 2.2 3.7 3.7Gain on disposal of A300 - - 3.3 --------- --------- --------Net exceptional items before taxation 2.2 3.7 0.8 --------- --------- -------- On 3rd July 2006, the Group completed the sale of the trade, assets andliabilities of Channel Express (CI) Limited to a third party specialising inChannel Islands distribution. The disposal is analysed as follows: £m Net Assets disposed of:Fixed Assets 0.8Debtors 2.2Cash at bank -Creditors (1.4) -------- 1.6Costs of disposal 0.2Profit on disposal 2.2 --------Proceeds 4.0 ========Satisfied by:Cash 4.0 ======== The profit attributable to members of the parent company for the half year to 30September 2006 includes profits of £0.2m earned by Channel Express (CI) Limitedup to the date of disposal. During the half year to 30 September 2006 Channel Express (CI) Limitedcontributed £0.4m to the Group's net operating cashflows, received £0.1m inrespect of net returns on investments and servicing of finance, paid £0.1m inrespect of taxation and utilised £nil for capital expenditure and financialinvestment. 5. Profit and loss account reserve Half year to Half year to Year to 30 September 30 September 31 March 2006 2005 2006 (unaudited) (unaudited) (audited) (restated) (restated) £m £m £m Balance at the beginning of the 49.0 40.2 40.2periodProfit for the period 16.8 13.4 11.0Dividends paid in the period (1.8) (1.6) (2.4)Reserves movement arising from sharebased payment charge 0.1 0.1 0.2 --------- --------- -------- 64.1 52.1 49.0 --------- --------- --------6. Reconciliation of movements in shareholders' funds Half year to Half year to Year to 30 September 30 September 31 March 2006 2005 2006 (unaudited) (unaudited) (audited) (restated) (restated) £m £m £m Profit for the period 16.8 13.4 11.0Dividends paid in the period (1.8) (1.6) (2.4)Reserves movement arising from sharebased payment charge 0.1 0.1 0.2 --------- --------- --------Net addition to Profit and Loss reserve 15.1 11.9 8.8Issue of shares under share option schemes 0.3 0.1 0.6 --------- --------- --------Net addition to shareholders' funds 15.4 12.0 9.4 --------- --------- -------- Opening shareholders' funds 59.3 49.9 49.9 --------- --------- --------Closing shareholders' funds 74.7 61.9 59.3 --------- --------- -------- 7. Reconciliation of operating profit to net cash flow from operating activities Half year to Half year to Year to 30 September 30 September 31 March 2006 2005 2006 (unaudited) (unaudited) (audited) (restated) £m £m £m Operating profit 23.1 14.8 7.3Depreciation and impairment 10.8 9.1 16.6Amortisation of goodwill 0.3 0.3 0.5Profit on disposal of fixed assets 0.1 - -Share based payments 0.1 0.1 0.2Decrease / (increase) in stock 1.0 (1.2) (2.9)(Increase) / decrease in debtors (4.4) - 1.7(Decrease) / increase in creditors (7.2) (6.7) 17.6 --------- --------- --------Net cash flow from operating activities 23.8 16.4 41.0 --------- --------- -------- 8. Reconciliation of net cash flow to movement in net debt Half year to Half year to Year to 30 September 30 September 31 March 2006 2005 2006 (unaudited) (unaudited) (audited) (restated) (Decrease) in cash in the period (12.4) (14.2) (2.9)Cash outflow / (inflow) from decrease/(increase) in net debt 13.0 4.4 (6.2)in the period ------- -------- -------Change in net debt resulting fromcashflows in the period 0.6 (9.8) (9.1)Exchange differences (0.9) (0.3) 1.2Net (debt) / funds at beginning of period (5.5) 2.4 2.4 -------- -------- -------Net (debt) at end of period (5.8) (7.7) (5.5) -------- -------- ------- 9. Other matters The financial information for the year ended 31 March 2006 does not constitutestatutory accounts, as defined in Section 240 of the Companies Act 1985, but isbased on the statutory accounts for the year then ended. Those accounts, uponwhich the auditors issued an unqualified opinion, have been delivered to theRegistrar of Companies. The calculation of basic earnings per share is based on earnings for the periodended 30 September 2006 of £16.8m (2005 restated - £13.4m). The calculation ofbasic earnings per share before exceptional items is based on earnings beforeexceptional items for the period ended 30 September 2006 of £14.8m (2005restated - £9.7m). Both calculations are based on 139,501,501 shares (2005 -138,205,196) being the weighted average number of shares in issue for theperiod. This report will be posted on the Company's website, www.dartgroup.co.uk. 23 November 2006 This information is provided by RNS The company news service from the London Stock Exchange