Interim Results
Dart Group PLC
14 November 2002
FOR IMMEDIATE RELEASE 14 November 2002
DART GROUP PLC
Interim Results for the Six Months Ended 30 September 2002
Dart Group PLC, the distribution and aviation services group, announces its
interim results for the six months ended 30 September 2002.
CHAIRMAN'S STATEMENT
I am pleased to report on the Group's trading for the six months ended 30
September 2002. Profit before tax, and before the amortisation of goodwill, has
risen to £5.7m (2001: £5.2m) on turnover of £103.6m (2001: £99.2m). Earnings
per share, before the amortisation of goodwill, were 11.27p (2001: 10.38p).
Net borrowings have increased to £33.1m (2001: £22.8m). The increase in
borrowings has primarily arisen as a result of new loans taken out to finance
the purchase of four Boeing 737-300 aircraft, two of which will now be used by
the Group's recently announced low cost airline, Jet2, based at Leeds Bradford
International Airport. Gearing at 30 September 2002 was 89% (31 March 2002 :
66%) and interest cover was 10 times (2001 : 8 times).
First half sales in the Aviation Services Division increased by 11%, primarily
reflecting the increase in the passenger charter activity of the Boeing 737
fleet. Trading conditions in the Distribution Division remain tight and its
turnover was unchanged compared to the first half of last year.
The seasonal pattern of trading has changed, mainly as a result of the bias
towards passenger flying in the summer months. Second half profits,
therefore, are unlikely to show the same level of increase as in the first half.
As previously announced, start up costs in respect of Jet2 are forecast to
be £2m, which will be incurred later in this financial year.
Accordingly, the Board has declared an unchanged interim dividend of 1.85p per
share. The dividend will be paid on 3 January 2003 to shareholders on the
register as at 22 November 2002.
Aviation Services
Channel Express (Air Services)' contract cargo and passenger operations have had
a successful first half. Four Airbus A300 'Eurofreighters' are contracted to
express parcel delivery companies, whilst two Boeing 737-300 'Quick Change'
aircraft operate night mail services for Royal Mail and passenger charters
during the day. The four Boeing 737-300s recently purchased by the Group have
now been delivered. One is currently undergoing conversion to a freighter
whilst a second will be converted to a Quick Change (enabling it to operate as
either a passenger or cargo aircraft) next year. The two other aircraft are
flying passenger charters prior to the start of Jet2 operations in February
2003. The Group's six Fokker F27s, and remaining Electra, are fully contracted
to operate nightly mail, express parcel and newspaper distribution flights.
Channel Express Parts Trading, the company's aircraft parts business, has
widened its activity to support Boeing 737 and Airbus A320 aircraft.
Currently, trading is less profitable than last year, however, it is expected
that the widened customer base will shortly enable growth to resume.
In order to enhance the Division's potential for growth, the Group has formed a
new low cost airline within Channel Express (Air Services). Trading alongside
the existing contract cargo and passenger charter operations and utilising the
company's existing resources, Jet2 will fly 'low cost, no frills' services to
European leisure and business destinations from Leeds Bradford International
Airport. The North of
England is currently poorly served in this sector, yet there is a catchment
area of around nine million people within one-and-a-half hour's drive of Leeds
Bradford. The Group believes it is well positioned to be successful in this
business as it has the necessary operational infrastructure already in place and
its success in the contract passenger and cargo business has always depended
upon the delivery of cost-effective and time-sensitive services to demanding
customers.
The success of the leading no frills airlines has been well documented. They
bring the opportunity for leisure travellers, who may not have considered
regular air travel before, to take more frequent holidays and short breaks
abroad. They are enabling many families to visit second homes in Southern
Europe and truly facilitate changes in travel habits and lifestyles. Business
travellers are also cutting their costs as the range of European destinations
served from each airport increases. We believe that there is huge potential
for further growth in the provision of low cost services in coming years.
The Group's philosophy will be to offer a friendly service at the lowest
possible cost thereby maximising the opportunities for our customers to travel
and minimising financial exposure. Operations at Leeds Bradford will commence
in mid February 2003 with two Boeing 737-300s. Two additional aircraft will be
added during the Spring with further aircraft added to meet demand. The
additional aircraft will be leased or purchased as appropriate. The company
will take bookings from early December and it is expected that the majority of
these will be made via the Jet2 website at www.jet2.com.
I am also pleased to be able to report the continued success of the Group's
freight forwarder, Benair Freight International. With offices at London
Heathrow, Manchester, East Midlands and Newcastle airports and in Singapore,
Benair's sales and profits are continuing to grow and the company has recently
won a significant number of new accounts in a competitive market. This is a
creditable reflection of the company's excellent service provided by
professional and dedicated staff.
Distribution
Good progress is being made in rationalising and integrating the operations of
our fresh produce and horticulture distribution companies Fowler Welch and
Coolchain, which together are the leading suppliers of consolidation and
distribution services in their sector, working for supermarkets, importers and
wholesalers throughout the country.
By the end of the financial year we plan to have a simplified management
structure and single points of contact for our customers. Care is being taken
to ensure that the spirit and standard of customer service for which the
companies are known is maintained, but is delivered by a more efficient
organisation. The process is greatly assisted by the recent implementation of
the new common computerised vehicle planning and operating system across the
operating sites. This tool will allow vehicle schedulers to radically improve
the utilisation of the fleet of around 500 owned and subcontracted temperature
controlled vehicles.
By next Spring we will be well advanced in our mission to deliver the quality
but cost-effective services supermarket customers demand. This progress is
essential to meet their price expectations. As they achieve supply chain
efficiencies by taking control of their products at the 'factory gate', they are
able to offer us greater distribution volumes in return for keener prices.
Their proposed volumes and our own cost efficiencies have already been factored
into the prices we have negotiated going forward. We believe that we will now
be in prime position to win extra business at service levels and at rates our
competitors will find difficult to match.
Our two offshore distribution companies, Channel Express (C.I.), which
specialises in transport and distribution services to and from the Channel
Islands, and Fowler Welch BV, which primarily imports produce and horticultural
products from the Netherlands into the UK, often feeding the Fowler Welch
distribution system, continue to prosper and grow. These niche businesses have
considerable potential for further development and form an important part of our
Group operations.
Outlook
Finally, I would like to thank all our staff for their support and contribution
to the Group's success. We are a service business and each individual's effort
is valued and important. I am also pleased to report that trading during the
second half of the year continues satisfactorily.
Philip Meeson,
Chairman 14 November 2002
www.dartgroup.co.uk
Enquiries: Philip Meeson, Chairman
Tel: 01202 597676 Mobile: 07785 258666
Mike Forder, Group Finance Director
Tel: 01202 597676 Mobile: 07721 865850
UNAUDITED INTERIM CONSOLIDATED RESULTS
for the half year to 30 September 2002
Half year to Half year to Year to
30 September 30 September 31 March
2002 2001 2002
(unaudited) (unaudited) (audited)
Note £'000 £'000 £'000
Turnover - continuing operations 1 103,585 99,225 194,242
Net operating expenses, excluding amortisation of goodwill (97,329) (93,323) (183,233)
Amortisation of goodwill (248) (248) (497)
Net operating expenses (97,577) (93,571) (183,730)
Operating profit - continuing operations 6,008 5,654 10,512
Profit/(loss) on disposal of fixed assets 10 (13) 232
Net interest payable 2 (593) (680) (1,257)
Profit on ordinary activities before taxation 5,425 4,961 9,487
Taxation (1,804) (1,657) (3,179)
Profit on ordinary activities after taxation 3,621 3,304 6,308
Dividends (636) (633) (2,094)
Retained profit for the period 2,985 2,671 4,214
Earnings per share
- basic 10.55p 9.65p 18.41p
- basic, excluding the amortisation of goodwill 11.27p 10.38p 19.87p
- diluted 10.49p 9.55p 18.25p
Dividend per share 1.85p 1.85p 6.11p
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Half year to Half year to Year to
30 September 30 September 31 March
2002 2001 2002
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Profit on ordinary activities after taxation 3,621 3,304 6,308
Foreign exchange gain on foreign equity investments (6) 6 (18)
Total gains and losses recognised in the period 3,615 3,310 6,290
CONSOLIDATED BALANCE SHEET
at 30 September 2002
30 September 31 March
2002 2002
(unaudited) (audited)
Note £'000 £'000
Fixed assets
Intangible assets 8,526 8,774
Tangible assets 67,684 54,790
76,210 63,564
Current assets
Stock 2,609 2,507
Debtors 31,385 29,817
Cash at bank and in hand 4,885 1,356
38,879 33,680
Current liabilities
Creditors: amounts falling due within one year (43,361) (39,546)
Net current liabilities (4,482) (5,866)
Total assets less current liabilities 71,728 57,698
Creditors: amounts falling due after more than one year (29,781) (18,970)
Provision for liabilities and charges (4,657) (4,432)
(34,438) (23,402)
37,290 34,296
Capital and reserves
Called up share capital 1,716 1,716
Share premium account 7,674 7,659
Profit and loss account 3 27,900 24,921
Shareholders' funds - equity interests 37,290 34,296
CONSOLIDATED CASH FLOW STATEMENT
for the half year to 30 September 2002
Half year to Half year to Year to
30 September 30 September 31 March
2002 2001 2002
(unaudited) (unaudited) (audited)
Note £'000 £'000 £'000
Net cash inflow from operating activities 4 13,523 10,640 21,566
Returns on investment and servicing of finance
Interest paid: bank and other loans (700) (697) (1,360)
Interest element of finance lease rental payments - (13) (20)
Interest received: bank 10 30 123
(690) (680) (1,257)
Taxation
Corporation tax paid (1,450) (1,016) (2,343)
Capital expenditure and financial investment
Purchase of tangible fixed assets (23,372) (28,456) (37,221)
Disposal of tangible fixed assets 259 397 957
Disposal of investments - - 59
(23,113) (28,059) (36,205)
Equity dividends paid (1,463) (1,422) (2,052)
Cash outflow before financing (13,193) (20,537) (20,291)
Financing
Share capital issued 15 62 114
Other loans repaid (10,907) (1,698) (14,518)
Bank loans repaid (173) (174) (345)
Other loans advanced 28,699 18,595 28,816
Finance lease capital (131) (131) (262)
17,503 16,654 13,805
Increase/(decrease) in cash in the period 4,310 (3,883) (6,486)
NOTES TO THE INTERIM RESULTS
at 30 September 2002
1. Turnover
Half year to Half year to Year to
30 September 30 September 31 March
2002 2001 2002
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Distribution 61,732 61,676 120,313
Aviation Services 41,853 37,549 73,929
103,585 99,225 194,242
Turnover arising within:
The United Kingdom and the Channel Islands 100,605 96,238 188,671
Mainland Europe 2,484 2,236 4,143
The Far East 496 751 1,428
103,585 99,225 194,242
Analyses of profit before taxation and net assets between the different
segments of the Group are not given as, in the opinion of the directors, such
analyses would be seriously prejudicial to the commercial interests of the
Group.
2. Net Interest Payable
Half year to Half year to Year to
30 September 30 September 31 March
2002 2001 2002
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
On bank loans and overdrafts (30) (71) (292)
On other loans (670) (626) (1,068)
On finance leases - (13) (20)
(700) (710) (1,380)
Interest receivable 10 30 123
(690) (680) (1,257)
Interest capitalised within tangible fixed assets 97 - -
(593) (680) (1,257)
3. Profit and loss account
Half year to Year to
30 September 31 March
2002 2002
(unaudited) (audited)
£'000 £'000
Balance at the beginning of the period 24,921 20,725
Retained profit for the period 2,985 4,214
Currency translation differences (6) (18)
27,900 24,921
4. 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
2002 2001 2002
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Operating profit 6,008 5,654 10,512
Depreciation 7,120 6,658 12,527
Amortisation of goodwill 249 248 497
Increase in stock (102) (1,187) (751)
Increase in debtors (1,568) (1,497) 148
Increase in creditors 1,822 758 (1,349)
Exchange differences (6) 6 (18)
13,523 10,640 21,566
5. Reconciliation of net cash flow to movement in net debt
Half year to Half year to Year to
30 September 30 September 31 March
2002 2001 2002
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Increase/(decrease) in cash in the period 4,310 (3,883) (6,486)
Cash inflow from increase in net debt in the period (14,861) (16,592) (13,691)
Change in net debt in the period (10,551) (20,475) (20,177)
Net debt at 1 April (22,503) (2,326) (2,326)
Net debt at end of period (33,054) (22,801) (22,503)
6. Other matters
The financial information for the year to 31 March 2002 does not constitute
statutory accounts, as defined in Section 240 of the Companies Act 1985, but is
based on the statutory accounts for the year then ended. Those accounts, upon
which the auditors issued an unqualified opinion, have been delivered to the
Registrar of Companies.
The accounts to 30 September 2002 have been prepared using accounting policies
consistent with those adopted for the year to 31 March 2002.
Basic earnings per share has been calculated by reference to earnings of
£3,621,000 (2001 : £3,304,000) and a weighted average number of ordinary shares
in issue of 34,320,676 (2001: 34,221,983).
This report is being sent to all shareholders and copies are available from
the Company Secretary at the registered office of the Company, Building 470,
Bournemouth International Airport, Christchurch, Dorset, BH23 6SE.
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