REG - Jet2 PLC - Final Results
06/07/2023 07:00
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RNS Number : 1034F Jet2 PLC 06 July 2023
Jet2 plc
PRELIMINARY UNAUDITED RESULTS FOR YEAR ENDED 31 MARCH 2023
Jet2 plc, the Leisure Travel group (the "Group" or the "Company"), announces
its preliminary results for the year ended 31 March 2023.
Group financial highlights 2023 2022 2020 Change
Unaudited 2023 vs 2020
Revenue £5,033.5m £1,231.7m £3,584.7m 40%
Operating profit / (loss) £394.0m (£323.9m) £293.0m 34%
Profit / (loss) before hedge ineffectiveness, FX revaluation and taxation £390.8m (£376.2m) £264.2m 48%
Profit / (loss) before taxation £371.0m (£388.8m) £153.2m 142%
Profit / (loss) for the period after taxation £290.8m (£315.4m) £116.0m 151%
Basic earnings per share 135.4p (147.0p) 77.9p 74%
Final dividend per share 8.0p - - 100%
* The rebound in consumer confidence to travel helped underpin a significantly
improved financial performance as Group profit before FX revaluation and
taxation increased to £390.8m† (2022: £376.2m loss†) which was 48%
higher than the pre-Covid financial year ended 31 March 2020 reporting period.
* Jet2.com flew a total of 16.22m (2022: 4.85m) single sector passengers, an
increase of 234%, with higher margin package holiday customers representing
64.9% of overall flown passengers (2022: 51.3%) which was also 13.2 ppts
higher than 2020.
* Pleasingly, average load factor achieved was 90.5% (2022: 69.2%) on a 156%
increase in seat capacity to 17.93m (2022: 7.01m), underlining the popularity
of our leisure travel products.
* Despite having absorbed delay and associated compensation costs in excess of
£50.0m as a direct impact of the broader disruption seen across the aviation
sector and its supply chains in mid-summer 2022, Group operating profit
increased by 222% to £394.0m (2022: £323.9m loss).
* Total cash balances at the year-end of £2,624.7m (2022: £2,228.5m) increased
18%. 'Own Cash'† which excludes advance customer deposits, increased by 4%
to £1,127.1m (2022: £1,083.8m).
* In view of the positive financial performance and in keeping with its previous
principle of paying a moderate dividend, the Board has resolved to pay a final
dividend of 8.0p per share (2022: nil).
* In March 2023, the Group was delighted to take delivery of the first of its 98
firm ordered Airbus A321/A320neo aircraft, which could eventually extend up to
146 aircraft.
* In April 2023, the Group announced an equity investment in a new SAF
production plant to be constructed in the North West of England - one of the
first such deals in UK aviation.
* We recently announced our intention to commence operations from Liverpool John
Lennon Airport from March 2024 - our eleventh UK base.
* On sale seat capacity for Summer 2023 is currently 7.5% higher than Summer
2022 at 15.29m seats. Although average load factors are currently 0.8ppts
behind Summer 2022 at the same point, positively the mix of higher margin
Package Holiday customers represents over 73% of total departing passengers at
present, which is over 5ppts higher than Summer 2022.
* Despite the Group facing various input cost pressures, pricing to date for
both our package holidays and flight-only products has been robust and
consequently margins per booked passenger satisfactory.
* We are cognisant of how quickly the macro-economic environment is evolving and
how this may affect consumers' future spending. However, we continue to
believe that the end-to-end package holiday is a resilient and popular
product, particularly during difficult economic times.
* For the long term, our strategy remains consistent - To be the UK's Leading
and Best Leisure Travel Business - with 'People, Service, Profits' serving as
our guiding principles. Put simply, our Customers want to be looked after
throughout their eagerly anticipated holiday experience by a happy, well paid
and motivated team of Jet2 Colleagues who continue to deliver outstanding
service, thereby generating sustainable long-term profitability - in short,
Nothing Beats a Jet2holiday!
† Further information on the calculation of this measure can be found in
Note 6.
Analyst and Investor call
The management team will host an investor and analyst conference call at
9.00am UK time, on Thursday, 6th July 2023. For dial-in details for the
conference call, please contact Buchanan Communications in advance to
register: Jet2@buchanan.uk.com.
OUR CHAIRMAN'S STATEMENT
The conclusion of the Covid-19 pandemic and the unprecedented challenges faced
by everyone during it, unleashed an enormous surge of pent-up demand for those
experiences that consumers had truly missed in the preceding two years. One of
the most important of these experiences was the opportunity to enjoy a much
deserved, rejuvenating and relaxing overseas holiday.
And I am pleased to say, that despite a difficult return to normal operations,
primarily due to the lack of planning and preparedness of many airports and
associated suppliers, our UK Leisure Travel Business - which encompasses
Jet2holidays, our acclaimed ATOL licensed package holidays provider, and
Jet2.com, our award-winning airline - responded determinedly to provide our
Customers with their eagerly anticipated Real Package Holidays from
Jet2holidays®.
Results for the financial year
The resumption of international travel in early 2022 resulted in the Group's
financial performance for the year ended 31 March 2023 exceeding our
pre-pandemic performance for the year ended 31 March 2020.
The positive progress reflects the decisions made in late 2021 to retain over
8,000 loyal Colleagues throughout the pandemic, recruiting and training in
good time for Summer 2022, making early and substantial marketing investments
and giving meaningful salary increases to all Colleagues. It also demonstrates
the robust and sustainable nature of our business model.
For the reporting period, seat capacity increased 13% against 2020 and buoyant
customer demand resulted in the business achieving an average load factor of
90.5% (2020: 92.2%). Higher margin Package Holiday customers grew by 40% to
5.29m (2020: 3.77m) and were a materially higher mix of total departing
passengers at 64.9% (2020: 51.7%), with Flight-Only passengers reducing by 19%
to 5.69m (2020: 7.06m).
Despite being very well prepared for our summer operations, plus the
exceptional dedication of our Colleagues who consistently went above and
beyond to ensure our Customers could finally embark on their long-awaited
holidays, regrettably some Customers experienced frustrating delays. These
hold ups were a direct consequence of the widespread disruption experienced
throughout the aviation sector, including but not limited to ground handling
suppliers' poor customer service, long queues for airport security checks and
bottlenecks in baggage handling areas, all of which led to extreme levels of
airport congestion. Consequently, delay and associated compensation costs
under Regulation EU261 UK, exceeded £50.0m.
Despite these challenges, we were very proud that Jet2.com earned 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 - we were
determined that our Customers should enjoy their well-deserved holidays!
Similarly, the financial performance of our in-flight retail operation was
weaker than expected during early Summer 2022. This was largely attributable
to inadequate onboard product availability caused by resource limitations at
our third-party in-flight retail provider.
However, despite having absorbed these substantial disruption costs, I am
pleased to report that Group profit before FX revaluation and taxation
increased to £390.8m† (2022: £376.2m loss†) which was also 48% higher
than the financial year ended 31 March 2020, the last pre-Covid reporting
period.
After accounting for net FX revaluation losses of £19.8m (2022: £12.6m),
total profit before taxation was £371.0m (2022: £388.8m loss).
† Further information on the calculation of this measure can be found in
Note 6.
Dividend
Prior to the pandemic, and subject to satisfactory financial performance, the
Board traditionally paid a modest dividend whilst seeking to re-invest the
majority of cash generated in growing the business. For the year, basic
earnings per share were 135.4p (2022: (147.0p)) and in view of the positive
financial performance and in keeping with its previous principle, the Board
has resolved to pay a final dividend of 8.0p per share (2022: nil). This final
dividend is subject to shareholders' approval at the Company's Annual General
Meeting on 7 September 2023 and will be payable on 25 October 2023 to
shareholders on the register at the close of business on 22 September 2023,
with the ex-dividend date being 21 September 2023.
Our Strategy
To be the UK's Leading and Best Leisure Travel business
In February 2003, Jet2.com proudly welcomed its first Customers onboard, and
over 100 million happy holidaymakers later, we were thrilled to celebrate our
20th anniversary in February 2023, with Jet2holidays now the UK's largest
package holiday provider and Jet2.com the UK's 3rd largest airline by number
of passengers flown.
While many aspects have evolved in the intervening years, our unwavering
commitment to our "Customer First" ethos has remained steadfast and is what
has driven Jet2's continuing success. At the core of Jet2holidays and Jet2.com
brand values lies the dedication to delivering exceptional service. We
recognise that whether our Customers choose to embark on end-to-end Real
Package Holidays from Jet2holidays®, or simply enjoy a holiday flight with
Jet2.com, providing an appealing and memorable holiday experience fosters
loyalty and encourages repeat bookings.
Our long-term ambition remains: To be the UK's Leading and Best Leisure Travel
business. Achieving this objective demands a clear strategic vision and an
unwavering customer focus, accompanied by consistent and often material
investment.
New Aircraft Order
In October 2022 we were pleased to announce that we were entering into a
further agreement with Airbus to purchase another 35 new firm ordered Airbus
A321/A320neo aircraft with the ability for this to extend up to 71 aircraft.
Combined with existing orders, this brings the total number of firm ordered
Airbus A321/A320neo aircraft for the Group to 98, which could eventually
extend up to 146 aircraft. Critically, this agreement ensures certainty of
supply well into the next decade.
The Group was delighted to take delivery of the first of these aircraft in
March 2023. With a spacious cabin capacity for 232 passengers and operational
advantages through reduced fuel consumption and resultant carbon emissions per
seat, plus a much lower noise footprint against previous generation single
aisle aircraft models, these aircraft will enable Jet2.com and Jet2holidays to
grow more sustainably. We are certain that the introduction of the
A321/A320neo aircraft will ensure that our Customers continue to have a
wonderfully comfortable and enjoyable experience for many years to come.
Investment in Sustainable Aviation Fuel
As a socially and environmentally responsible airline and tour operator, we
take our environmental impact seriously. We firmly believe that Sustainable
Aviation Fuel ("SAF") is currently one of the most effective solutions for
reducing carbon emissions and is key to achieving net-zero status by 2050.
Consequently, in April 2023, the Group announced an equity investment in a new
SAF production plant to be constructed in the North West of England - one of
the first such deals in UK aviation. The Fulcrum NorthPoint facility, being
developed by Fulcrum BioEnergy Ltd, will operate as a Waste-to-Fuels plant,
and is anticipated to commence SAF production by 2027. Once operational,
Jet2.com will receive a significant volume of SAF from the plant and expects
to achieve net emissions reductions totalling approximately 400,000 tonnes of
CO(2) over the 15-year period of the agreement.
New Training Facility
In February 2023, we were pleased to announce a new Airbus A321 flight
simulator and training centre at Cheadle, near Manchester Airport. The new
centre builds on the success of the Company's first training centre near
Bradford, which opened in 2014. This bespoke facility will provide a centre of
excellence for existing and new pilots, engineers, cabin crew and ground
operations Colleagues. The three-storey building will house full and
fixed-base flight simulators, cabin crew trainer units, engineering training
devices to enact real-life scenarios, high-tech computer based training rooms,
fully equipped classrooms and briefing rooms. The centre enables Jet2.com to
underpin its growth ambitions by training thousands of Colleagues each and
every year.
New UK Base
Finally in May 2023, we were delighted to announce the launch of our highly
acclaimed flights and holidays from Liverpool John Lennon Airport. This
development marks a significant milestone as it becomes our eleventh UK base
and is aligned with our long-term strategy to sustainably grow our successful
business.
Recognising the significant demand from both consumers and independent travel
agents across Liverpool, Merseyside and the wider region, we are looking
forward to commencing operations from March 2024. Between now and then, our
focus is on meticulous preparation to ensure a seamless launch, so that from
day one we can provide Customers with the same award-winning service which has
delighted millions of others across the UK for so many years!
Nothing Beats a Jet2holiday!
Our Customers
We deeply appreciate the trust that our Customers place in us to provide them
with an exceptional holiday experience, and there is no better validation of
our performance than the recognition received from the consumer champion
Which? and its members.
We take immense pride in the fact that Jet2.com, Jet2holidays, and
Jet2CityBreaks continue to hold the distinguished status of being Which?
Recommended Providers, reflecting our unwavering commitment to delivering
exceptional service. Additionally in July 2023, Jet2Villas was named as a
Which? Recommended Provider for the first time - a great achievement. We are
also delighted that Jet2.com and Jet2holidays have recently been honoured as
Travel Brand of the Year 2023 by Which?, marking the second consecutive year
and the third time in six years that we have received this prestigious
accolade. This recognition acknowledges our dedication to prioritising our
Customers' satisfaction, both throughout the challenging period of the
pandemic and following the resumption of international travel.
We understand that during times of uncertainty, consumers seek operators they
can trust and who offer them the best value for their money. Therefore, our
total focus leading up to Summer 2023 has been on delivering the same
industry-leading levels of customer service that our Customers have come to
expect from us.
With this in mind, we have assumed direct control of all ground-handling
operations (check-in; baggage handling and aircraft despatch) at a further two
of our UK bases: Bristol and Newcastle - this means we now independently
'self-handle' at seven of our eleven UK bases and our Colleagues now control
and manage passenger check-in at all but one of our UK bases. This expansion
ensures a seamless and efficient experience for our valued Customers and
eliminates any reliance on third parties for these crucial aspects of our
operations.
As a result of our unwavering focus to do what is right for our Customers, we
are confident they will be even more determined to indulge in the wonderful
experience of a well-deserved Jet2holiday and we are fully committed to doing
our very best to ensure that each of them "has a lovely holiday".
Our Colleagues
At the core of our company culture lies a deep-rooted "Customer First" ethos,
guided by our principles of People, Service, Profits - great and attentive
customer service is where we aim to excel.
Whether in the UK or Overseas, the ability of our Colleagues to continuously
display our Company's 'Take Me There' values (Be Present; Create Memories;
Take Responsibility; and Work As One Team), is of paramount importance in
upholding our standards. This "Customer First" approach has set us apart and
enabled us to be consistently recognised as an industry leader for our
outstanding customer service.
Throughout the year, our Colleagues have worked tirelessly, particularly
during the challenging period of early Summer 2022. The Board is hugely
appreciative for their tremendous support and efforts, which enabled Jet2.com
and Jet2holidays to fulfil the dreams of so many Customers, taking them on
their well-deserved and eagerly anticipated holidays.
To recognise the invaluable contribution our Colleagues made, we were very
pleased to award pay increases totalling 8% during the year ended 31 March
2023 together with an end of summer season 'Thank You Bonus' of £1,000 each.
We firmly believe that happy and well paid Colleagues are fundamental to the
future success of our business and with this and the pressures of elevated
inflation levels in mind, we awarded a pay increase of 9% to them all for the
year ending 31 March 2024.
In addition, we launched our award-winning ShareSave Scheme in September 2022,
offering Colleagues the opportunity to become shareholders in Jet2 plc, by
granting options to acquire shares in the Company at a discount to the
prevailing August 2022 share price, subject to the completion of three years'
employment. The take-up rate was in excess of 60% - a very pleasing outcome.
Finally, we are delighted that the successful financial performance of the
Group for the year ended 31 March 2023 has allowed us to reinstate both our
Discretionary Colleague Profit Share Scheme for non-management Colleagues and
our Discretionary Bonus Scheme for management Colleagues. These payments,
which will be the first in four years due to the pandemic, will be made in the
July 2023 payroll.
The Board is dedicated to upholding our People, Service, Profits ethos and is
satisfied that the investment made in our Colleagues has resulted in engaged
and dedicated teams who are committed to carry on delivering the outstanding
"Customer First" service that means so much to our Customers, and which has
contributed immeasurably to our long-term success.
Our Stakeholders
Suppliers
We recognise the importance of cultivating strong relationships with our many
suppliers to realise our growth objectives. We were delighted to be able to
resume our annual supplier conference where we focused on how we and our
supplier partners can work together effectively to forge mutually beneficial
long-term relationships. These strong partnerships are proving crucial as we
head towards our peak flying operation in Summer 2023.
We also acknowledge the importance of timely and full payment to our
suppliers, including of course our hotel partners, to underpin their financial
well-being. In accordance with the 'Duty to report on payment practices and
performance' legislation, the average invoice payment period during the year
reduced to 20.2 days (2022: 23.9 days) for Jet2.com Limited and to 22.7 days
(2022: 27.5 days) for Jet2holidays Limited.
Shareholders
We maintain open lines of communication with our shareholders and
institutional investors, engaging with them appropriately through regular
interactions such as at Preliminary and Interim results meetings, individual
investor meetings, broker/institutional conferences and at our Annual General
Meeting.
UK Government and the Civil Aviation Authority
The Executive Directors and certain senior managers within the organisation
regularly engage with senior representatives of the UK government and
regulatory bodies. In the past year, discussions focused on addressing the
operational disruption faced by the aviation industry in the early stages of
the Summer 2022 season, as well as numerous meetings with the government and
industry associations on the future of sustainable air travel. Furthermore,
our Chief Executive Officer actively engages with government, business and
tourism bodies in the UK and in our destination countries, fostering
relationships at both national and regional levels.
In addition, our Group Chief Financial Officer has regular dialogue with the
UK Civil Aviation Authority on the financial performance of the Group and our
Accountable Manager, the Managing Director of Jet2.com, meets regularly with
his respective counterparts.
Our Commitment to Sustainability
As a major provider of leisure travel in the UK, taking millions of people
away on holiday, Jet2 plc aspires to be "the leading brand in sustainable air
travel and package holidays".
Consequently, we endeavour to operate in the most efficient and sustainable
manner possible, focusing on minimising both emissions and carbon intensity
(emissions per passenger kilometre) and we continue to make steady progress
against the targets published in our Sustainability Strategy in September
2021.
In addition to the significant investment made in new Airbus aircraft which
extends well into the next decade, and our commitment to long-term SAF
production, our efficient operations also contribute to minimising our
environmental impact in terms of noise and air quality pollutants. These
efforts are integral to our journey towards achieving our Jet2 Net Zero 2050
commitment.
Following the return to more normalised levels of flight activity and
pre-pandemic load factors, the Group successfully reduced its CO(2) emissions
per passenger kilometre from 67.0g in 2019 to 65.9g, representing positive
progress towards our 2025 target of 65.0g.
Jet2 plc fully complies with both national and international efforts aimed at
combatting climate change, which include the UK and EU Emission Trading
Schemes (ETS) and the Carbon Offsetting and Reduction Scheme for International
Aviation (CORSIA). In addition, during the year the Group offset all emissions
not covered by UK and EU ETS existing carbon pricing mechanisms. This equated
to voluntary offsets of over 1.5m tonnes of carbon emissions. We were
delighted to work with our offsetting partner, Vertis, in selecting projects
including the Darajat Geothermal Project in Indonesia and the Aksu Wind Power
Project in Türkiye, ensuring that the real-world impact of our carbon
offsetting program is maximised.
Following consistent investment, 47% of our Ground Support Equipment now
operates on zero-carbon technology, and we have achieved an 80% reduction in
single-use plastics on our aircraft as compared to 2019 - equivalent to
removing 11 million items per annum!
Finally, Jet2holidays is acting on the environmental impacts in its supply
chain by continuing discussions with its hotel partners and the Global
Sustainable Tourism Council to implement a hotel sustainability labelling
scheme, thereby enabling Customers to make more sustainable accommodation
choices. More detailed information on the Group's Sustainability Strategy can
be found at www.jet2plc.com/sustainability
(http://www.jet2plc.com/sustainability) .
Our Board
The Board acknowledges its responsibility for ensuring the enduring prosperity
of the Group. This includes overseeing its effective management and being
accountable to shareholders by making decisions that generate both long-term
value and ensure that the foundations of the business remain strong and
sustainable in an ever-changing marketplace.
Consequently in April 2023, the Board was very pleased to announce the
appointments of Simon Breakwell and Angela Luger as independent Non-Executive
Directors of the Company with effect from 27 April and 3 July 2023
respectively. Their extensive expertise aligns perfectly with the current
phase of our growth, and we have full confidence in their ability to make
substantial contributions to the success of our business as we continue our
focus on People, Service, Profits.
Outlook
On sale seat capacity for Summer 2023 is currently 7.5% higher than Summer
2022 at 15.29m seats. Although average load factors are currently 0.8ppts
behind Summer 2022 at the same point, positively the mix of higher margin
Package Holiday customers represents over 73% of total departing passengers at
present, which is over 5ppts higher than Summer 2022.
Despite the Group facing various input cost pressures such as fuel, carbon
taxes, a strengthened US dollar and wage increases, as well as investment to
support the well-being and work-life balance of our Colleagues, pricing to
date for both our package holidays and flight-only products has been robust
and consequently margins per booked passenger satisfactory.
Looking forward, although we continue to believe that the end-to-end package
holiday is a resilient and popular product, particularly during difficult
economic times and our ability to offer truly variable duration holidays
enables our Customers to tailor their holiday plans to suit their individual
budgets, we are cognisant of how quickly the macro-economic environment is
evolving and how this may affect consumers' future spending.
On that basis, and with the peak summer months of July, August and September
not yet complete plus the majority of Winter 2023/2024 seat capacity still to
sell, it remains premature as is always the case at this time of year, to
provide definitive guidance as to Group profitability for the financial year
ending 31 March 2024.
For the long term our strategy remains consistent - To be the UK's Leading and
Best Leisure Travel Business - with 'People, Service, Profits' serving as our
guiding principles. Put simply, our Customers want to be looked after
throughout their eagerly anticipated holiday experience by a happy, well paid
and motivated team of Jet2 Colleagues who continue to deliver outstanding
service, thereby generating sustainable long-term profitability - in short,
Nothing Beats a Jet2holiday!
Philip Meeson
Executive Chairman
6 July 2023
BUSINESS & FINANCIAL REVIEW
The Group's financial performance for the year ended 31 March 2023 is reported
in accordance with UK-adopted international accounting standards and
applicable law.
Summary Income Statement 2023 2022 2020 Change
£m £m £m 2023 vs 2020
Unaudited
Revenue 5,033.5 1,231.7 3,584.7 40%
Net operating expenses (4,639.5) (1,555.6) (3,291.7) (41%)
Operating profit / (loss) 394.0 (323.9) 293.0 34%
Net financing expense (excluding Net FX revaluation losses) (5.8) (53.4) (29.5) 80%
Profit on disposal of property, plant and equipment 2.6 1.1 0.7 271%
Profit / (loss) before hedge ineffectiveness, FX revaluation and taxation 390.8 (376.2) 264.2 48%
Hedge ineffectiveness - - (108.4) 100%
Net FX revaluation losses (19.8) (12.6) (8.1) (144%)
Profit / (loss) before taxation from continuing operations 371.0 (388.8) 147.7 151%
Profit before taxation from discontinued operations - - 5.5 (100%)
Profit / (loss) before taxation 371.0 (388.8) 153.2 142%
Net financing expense (including Net FX revaluation losses) 25.6 66.0 37.6 32%
Depreciation 185.2 158.3 204.5 9%
Hedge ineffectiveness - - 108.4 100%
EBITDA from continuing operations* 581.8 (164.5) 498.2 17%
* EBITDA is included as an alternative performance measure in order to aid
users in understanding the underlying operating performance of the Group.
Further information can be found in Note 6.
Customer Demand & Revenue
The rebound in consumer confidence to travel following the resumption of
international flying in early 2022 reaffirmed our decision to invest well
ahead of the Summer 2022 season to ensure we had an ample and capable
workforce available to deliver our popular holiday offering.
As a result, on sale seat capacity for the Summer 2022 season remained 14%
higher than Summer 2019. This planning stability allowed us to capitalise on
the sustained customer demand, particularly for our package holidays and,
combined with a resilient pricing environment and effective cost management,
not only resulted in a significantly improved financial performance compared
to the prior pandemic-impacted year, but also materially surpassed the result
achieved in the pre-pandemic year ended 31 March 2020.
During the financial year Jet2.com flew a total of 16.22m (2022: 4.85m) single
sector passengers, an increase of 234% with customers choosing our end-to-end
package holiday products increasing by 310% to 5.29m (2022: 1.29m) assisted by
certain high volume, popular routes operating package-only flights.
Consequently, higher margin package holiday customers represented 64.9% of
overall flown passengers (2022: 51.3%) which was 13.2 ppts higher than 2020.
Pleasingly, average load factor achieved was 90.5% (2022: 69.2%) on a 156%
increase in seat capacity to 17.93m (2022: 7.01m), underlining the popularity
of our leisure travel products and the resurgence in consumer confidence to
travel, with load factors in the latter months of the financial year broadly
in line with those of 2019/20.
Average flight-only ticket yield per passenger sector at £100.28 (2022:
£67.90) was 48% higher than the prior year, due to changes in the mix of
destinations flown, notably an increase to those in the Eastern Mediterranean,
combined with strong consumer demand meaning fewer promotional offers were
required.
The average price of a Jet2holidays package holiday increased by 10% to £761
(2022: £689) reflecting changes in destination mix and favourable pricing
driven by the consistently robust consumer demand.
Non-Ticket Retail Revenue per passenger sector declined by 14% to £25.99
(2022: £30.28). This decrease can be largely attributed to the weaker than
anticipated performance of our in-flight retail operations, primarily due to
resource limitations at Jet2.com's third party in-flight retail supplier which
affected onboard product availability. Pleasingly, towards the end of summer
this disruption had largely abated and availability levels returned to the
high standards our Customers have come to expect and enjoy.
As a result, overall Group Revenue increased by 309% to £5,033.5m (2022:
£1,231.7m).
Net Operating Expenses
Higher levels of flying activity led to a corresponding 250% increase in
direct operating expenses (including direct staff costs) to £3,843.0m (2022:
£1,099.3m), significantly lower than the revenue growth.
It is important to note that this result was achieved despite the severe
operational challenges experienced during mid-Summer 2022 due to the lack of
planning and investment by many airports and their associated suppliers.
Despite the tremendous efforts of our Colleagues, this disruption led to a
significant increase in flight delays in excess of three hours deemed eligible
under EU261 UK. As a result, delay and associated compensation costs exceeded
£50.0m, over 200% higher than those incurred in the financial year ended 31
March 2020.
As a gesture of the Board's huge appreciation of their tremendous efforts and
support, all Colleagues received an end of summer 'Thank You Bonus' of £1,000
in recognition of the strong operational and financial performance achieved,
despite the very challenging circumstances.
Underlying wage costs increased as a result of an 8% pay award made during the
year, which recognised the fact that many had taken up to a 20% pay cut for
the majority of the pandemic period to support the Company and also reflected
the challenging inflationary environment.
Additionally, the Group continued to invest significant monies into colleague
recruitment and training, not only to ensure it was well-placed to capitalise
on consumer demand, but also to support a balanced lifestyle, particularly in
operational areas.
The purchase of carbon allowances to satisfy our obligations under the UK and
EU ETS resulted in a total charge of £76.7m and were acquired at an average
price (excluding voluntary offsetting) of £63.17, up by 14% on 2022 (£55.35)
and 350% on 2020 (£14.03).
Brand and direct marketing investment was over £90.0m higher than the
previous year at approximately £220m as the business ramped up activity
post-pandemic to optimise load factors for Summer 2022, and also drive
customer bookings for Winter 2022/2023 and Summer 2023.
Pleasingly, the successful performance of the Group has meant the
reinstatement of both our Discretionary Colleague Profit Share Scheme for
non-management Colleagues at 6% of pre-tax profit and Discretionary Bonus
Scheme for management Colleagues. These payments totalling approximately
£45m, will be the first since 2019 due to the pandemic and will be made in
the July 2023 payroll.
As a result, net operating expenses increased by 198% to £4,639.5m (2022:
£1,555.6m).
Operating profit
Overall Group operating profit for the year was £394.0m (2022: £323.9m
loss), a 34% increase on 2020 (£293.0m).
Net Financing Expense
Net financing expense of £25.6m (2022: £66.0m) is stated after finance
income of £58.7m (2022: £5.1m), which improved materially due to higher
levels of cash deposits coupled with increases to central bank interest rates
made over the course of the financial year. Finance expenses of £64.5m (2022:
£58.5m) increased primarily due to annualisation of the interest expense on
the Group's convertible bond, which resulted in a cost of £17.3m (2022:
£13.6m) and additional interest incurred on lease liabilities as a result of
aircraft acquired to support further fleet expansion.
In addition, a net FX revaluation loss of £19.8m (2022: £12.6m) resulted
from the year end revaluation of foreign currency denominated monetary
balances.
Statutory Profit for the Year
As a result, the Group made a statutory profit before taxation of £371.0m
(2022: £388.8m loss) which was over 150% higher than the pre-pandemic
performance in the year ended 31 March 2020.
Taxation
The Group recorded a tax charge of £80.2m (2022: £73.4m credit), at an
effective tax rate of 22% (2022: 19%). The Finance Bill enacted on 10 June
2021 detailed a proposed increase in the rate of corporation tax from 19% to
25% from 1 April 2023 and consequently, the Group has provided for all
deferred tax at 25% (2022: 25%).
Statutory Net Profit for the year and Earnings Per Share
Consequently, the Group made a statutory profit after taxation of £290.8m
(2022: £315.4m loss) and basic earnings per share were 135.4p (2022:
(147.0p)).
Other Comprehensive Income and Expense
The Group had an Other comprehensive expense of £179.0m (2022: £193.1m
income); the change compared to the prior year primarily due to the transfer
to the consolidated income statement over the course of the current year of
hedged gains from in-the-money fuel derivatives from the previous year.
Cash Flows and Financial Position
The Group continues to maintain a strong balance sheet with significant
liquidity which gives flexibility to pursue its growth aspirations and to
refresh certain of its aircraft fleet.
The following table sets out condensed cash flow data and the Group's cash and
cash equivalents and money market deposits:
Summary of Cash Flows 2023 2022 2020 Change
£m £m £m 2023 vs 2020
Unaudited
EBITDA from continuing operations 581.8 (164.5) 498.2 17%
EBITDA from discontinued operations - - 20.9 (100%)
Other Income Statement adjustments 7.8 3.0 (0.4) 2,050%
Operating cash flows before movements in working capital 589.6 (161.5) 518.7 14%
Movements in working capital 362.6 966.0 (21.5) 1,787%
Payment on settlement of derivatives - (15.5) - -
Interest and taxes (0.1) (38.0) (54.1) 100%
Net cash generated from operating activities 952.1 751.0 443.1 115%
Purchase of intangibles - - (26.8) 100%
Purchase of property, plant and equipment and right-of-use assets (196.6) (108.4) (211.3) 7%
Movement on borrowings (287.7) 268.5 27.0 (1,166%)
Movement on lease liabilities (76.2) (67.5) (99.7) 24%
Dividends paid in the year (6.4) - (15.5) 59%
Other items 11.0 5.9 9.1 21%
Net increase in cash and money market deposits ((a)) 396.2 849.5 125.9 215%
(a) Cash flows are reported including the movement on money market deposits
(cash deposits with maturity of more than three months from point of
placement) to give readers an understanding of total cash generation. The
Consolidated Statement of Cash Flows reports net cash flow excluding these
movements. Further information on these balances as at the year-end can be
found in Note 6.
Net Cash Generated From Operating Activities
The Group generated operating cash inflows before working capital movements of
£589.6m (2022: £161.5m outflow) primarily driven by the Leisure Travel
business trading performance which resulted in EBITDA improving to £581.8m
(2022: EBITDA of £164.5m loss).
In addition, movements in working capital resulted in cash inflows of £362.6m
(2022: £966.0m), principally due to holding higher levels of customer cash
deposits than the prior year from much improved forward bookings and an
increase in trade and other payables due to increased operational activity in
the final quarter of the year as compared to the previous year. After net
interest received of £15.1m (2022: £38.4m paid) and corporation tax payments
of £15.2m (2022: £0.4m refunded), the Group generated £952.1m of cash from
its operating activities (2022: £751.0m).
Net Cash Used In Investing Activities
Total capital expenditure amounted to £196.6m (2022: £108.4m) primarily
representing pre-delivery payments made for the Group's Airbus A321/A320neo
order and including the balance payment for the first Airbus A321neo delivery
received in March 2023. Additionally, we continued to invest in the ongoing
maintenance of our existing aircraft fleet, ensuring its long-term reliability
and performance. Furthermore, we were delighted to acquire a second flight
simulator and training centre near our Manchester Airport base. This bespoke
facility will serve as an additional dedicated training hub for our pilots,
cabin crew, engineers and other operational functions as we continue to grow
over the coming years. Finally, as part of our commitment to achieve the
targets set out within our Sustainability Strategy, we continued to invest in
improving the carbon efficiency of our ground service equipment at our UK
bases, transitioning from combustion engine to electric (either fully electric
or hybrid) powered alternatives.
Net Cash Used In Financing Activities
Net cash used in financing activities amounted to £370.3m (2022: £201.0m
cash generated from financing activities) following repayments of borrowings
and lease liabilities of £363.9m (2022: £327.0m), which included repayment
of the existing £65.0m Revolving Credit Facility ("RCF") and early repayment
of a £150.0m short term loan taken out during the pandemic, and an interim
dividend payment of £6.4m (2022: nil). There were no new loans advanced
during the year (2022: £528.0m).
Other items totalling an inflow of £11.0m (2022: £5.9m) are largely driven
by the effect of foreign exchange rate changes on the Group's cash and money
market deposit balances totalling £8.3m (2022: £4.8m) and £2.7m proceeds
from engine sales (2022: £1.1m).
Overall, this resulted in a net cash inflow of £396.2m (2022: £849.5m) and a
year-end gross cash position (including money market deposits)† of
£2,624.7m (2022: £2,228.5m). Net cash, stated after borrowings and lease
liabilities increased by 90% to £1,249.7m (2022: £658.3m).
At the reporting date, the Group had received payments in advance of travel
from its Leisure Travel customers amounting to £1,497.6m (2022: £1,144.7m)
and had increased its 'Own Cash'† balance to £1,127.1m (2022: £1,083.8m).
† Further information on the calculation of this measure can be found in
Note 6.
Liquidity
The Group maintains a robust financial position, characterised by a strong
balance sheet and ample liquidity. This financial strength gives the
flexibility to pursue our growth ambitions, comfortably repay our borrowings
and to renew certain aircraft within our fleet.
In October 2022, the Group successfully renegotiated its RCF, with the
addition of 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, which remains undrawn,
provides the Group with unsecured available facilities of up to £300m and
represents an increase of £200m from the previous arrangement.
An important feature of the new facility is its sustainability focus.
Commencing 1 April 2023, it will be linked via a margin ratchet adjustment to
sustainability criteria, specifically the Group's key climate metric - gCO2
per passenger kilometre aircraft fuel burn. This integration of sustainability
targets into our financing structure underscores our commitment to addressing
the climate impact and aligning our financial operations with our
environmental objectives.
Summary Statement of Financial Position 2023 2022 2020 Change
£m £m £m 2023 vs
2020
Unaudited
Non-current assets ((a)) 1,519.8 1,363.9 1,492.7 2%
Net liabilities ((b)) (115.0) (87.6) (138.7) 17%
Cash and money market deposits 2,624.7 2,228.5 1,387.5 89%
Deferred revenue (1,563.6) (1,189.1) (745.2) (110%)
Borrowings (729.2) (991.7) (485.7) (50%)
Lease liabilities (645.8) (578.5) (672.7) 4%
Deferred taxation (36.7) (12.6) (78.7) 53%
Derivative financial instruments (41.8) 163.7 (191.5) 78%
Assets held for sale - - 66.4 (100%)
Total shareholders' equity 1,012.4 896.6 634.1 60%
(a) Stated excluding derivative financial instruments.
(b) Stated excluding cash and cash equivalents, money market deposits,
deferred revenue, borrowings, lease liabilities and derivative financial
instruments.
Total shareholders' equity increased by £115.8m (2022: £67.6m decrease)
which included the profit after taxation of £290.8m (2022: £315.4m loss).
This was partially offset by a net movement within the cash flow hedging and
cost of hedging reserves of £182.9m, notably the crystallisation of prior
year in-the-money fuel derivatives during the year.
Our Leisure Travel business emerged from the pandemic at the beginning of 2022
firmly on the front foot, made possible by its strong Own Cash position, a
well-capitalised Balance Sheet and a highly committed, skilled workforce.
These invaluable resources have helped steer the Group through a phased
recovery to more normalised levels of operational activity. Moreover, they
form the bedrock of our growth ambitions for the coming years.
In addition, 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 and dynamic business, but also provides us with the necessary
financial resilience to adapt to and navigate potential challenges should they
arise.
Gary Brown
Group Chief Financial Officer
6 July 2023
Leisure Travel Key Performance Indicators 2023 2022 2020 Change 2023 vs 2020
Leisure Travel sector seats available (capacity) 17.93m 7.01m 15.85m 13%
Leisure Travel passenger sectors flown 16.22m 4.85m 14.62m 11%
Leisure Travel load factor 90.5% 69.2% 92.2% (1.7 ppts)
Flight-only passenger sectors flown 5.69m 2.36m 7.06m (19%)
Package holiday customers 5.29m 1.29m 3.77m 40%
Package holiday customers % of total passenger sectors flown 64.9% 51.3% 51.7% 13.2 ppts
Flight-only ticket yield per passenger sector (excl. taxes) £100.28 £67.90 £85.59 17%
Average package holiday price £761 £689 £687 11%
Non-ticket revenue per passenger sector £25.99 £30.28 £24.91 4%
Fuel requirement hedged - next 12 months 81.8% 87.6% N/A N/A
Advance sales made as at 31 March £3,028.2m £2,396.0m £1,679.2m 80%
For further information please contact:
Jet2 plc 0113 239 7692
Philip Meeson, Executive Chairman
Gary Brown, Group Chief Financial Officer
Cenkos Securities plc 020 7397 8900
Nominated Adviser
Katy Birkin / Camilla Hume
Canaccord Genuity 020 7523 8000
Joint Broker
Adam James
Jefferies International Limited 020 7029 8000
Joint Broker
Ed Matthews / Becky Lane
Buchanan 020 7466 5000
Financial PR
Richard Oldworth / Toto Berger
COnsolidated income statement (unaudited)
for the year ended 31 March 2023
Results for the Results for the
year ended year ended
31 March 2023 31 March 2022
£m £m
Revenue 5,033.5 1,231.7
Net operating expenses 3 (4,639.5) (1,555.6)
Operating profit / (loss) 394.0 (323.9)
Finance income 58.7 5.1
Finance expense (64.5) (58.5)
Net FX revaluation losses (19.8) (12.6)
Net financing expense 4 (25.6) (66.0)
Profit on disposal of property, plant and equipment 2.6 1.1
Profit / (loss) before taxation 371.0 (388.8)
Taxation (80.2) 73.4
Profit / (loss) for the year 290.8 (315.4)
(all attributable to equity shareholders of the Parent)
Earnings per share
- basic 5 135.4 p (147.0p)
- diluted 5 126.6 p (147.0p)
Consolidated statement of comprehensive income (UNAUDITED)
for the year ended 31 March 2023
Year ended Year ended
31 March 31 March
2023 2022
£m £m
Profit / (loss) for the year 290.8 (315.4)
Other comprehensive (expense) / income
Items that are or may be reclassified subsequently to profit or loss:
Cash flow hedges:
Fair value (losses) / gains (49.4) 225.2
Net amount transferred to Consolidated Income Statement (164.1) 22.4
Cost of hedging reserve - changes in fair value (17.0) (8.0)
Related taxation credit / (charge) 47.6 (46.5)
Revaluation of foreign operations 3.9 -
(179.0) 193.1
Total comprehensive income / (expense) for the year 111.8 (122.3)
(all attributable to equity shareholders of the Parent)
Consolidated Statement of Financial Position (UNAUDITED)
at 31 March 2023
2023 2022
£m £m
Non-current assets
Intangible assets 26.8 26.8
Property, plant and equipment 927.7 845.2
Right-of-use assets 565.3 491.9
Derivative financial instruments 14.3 20.5
1,534.1 1,384.4
Current assets
Inventories 40.2 8.5
Trade and other receivables 281.3 185.8
Derivative financial instruments 45.8 186.3
Money market deposits 1,669.5 1,181.0
Cash and cash equivalents 955.2 1,047.5
2,992.0 2,609.1
Total assets 4,526.1 3,993.5
Current liabilities
Trade and other payables 339.1 217.8
Deferred revenue 1,547.2 1,173.4
Borrowings 125.9 134.5
Lease liabilities 101.8 74.8
Provisions 57.4 41.8
Derivative financial instruments 85.1 39.6
2,256.5 1,681.9
Non-current liabilities
Deferred revenue 16.4 15.7
Borrowings 603.3 857.2
Lease liabilities 544.0 503.7
Provisions 40.0 22.3
Derivative financial instruments 16.8 3.5
Deferred taxation 36.7 12.6
1,257.2 1,415.0
Total liabilities 3,513.7 3,096.9
Net assets 1,012.4 896.6
Shareholders' equity
Share capital 2.7 2.7
Share premium 19.8 19.8
Cash flow hedging reserve (15.3) 155.2
Cost of hedging reserve (17.9) (5.5)
Other reserves 55.2 51.3
Retained earnings 967.9 673.1
Total shareholders' equity 1,012.4 896.6
consolidated statement of cash flows (UNAUDITED)
for the year ended 31 March 2023
2023 2022
£m £m
Profit / (loss) before taxation 371.0 (388.8)
Net financing expense (including Net FX revaluation losses) 25.6 66.0
Hedge ineffectiveness - 0.8
Depreciation 185.2 158.3
Profit on disposal of property, plant and equipment (2.6) (1.1)
Equity settled share-based payments 10.4 3.3
Operating cash flows before movements in working capital 589.6 (161.5)
Increase in inventories (31.7) (7.5)
Increase in trade and other receivables (117.5) (35.5)
Increase in trade and other payables 118.7 151.8
Increase in deferred revenue 374.5 866.7
Increase / (decrease) in provisions 18.6 (9.5)
Payment on settlement of derivatives - (15.5)
Cash generated from operations 952.2 789.0
Interest received 58.7 5.1
Interest paid (43.6) (43.5)
Income taxes (paid) / refunded (15.2) 0.4
Net cash generated from operating activities 952.1 751.0
Cash used in investing activities
Purchase of property, plant and equipment (193.9) (107.9)
Purchase of right-of-use assets (2.7) (0.5)
Proceeds from sale of property, plant and equipment 2.7 1.1
Net increase in money market deposits (481.9) (1,181.0)
Net cash used in investing activities (675.8) (1,288.3)
Cash (used in) / generated from financing activities
Repayment of borrowings (287.7) (259.5)
New loans advanced - 147.9
Payment of lease liabilities (76.2) (67.5)
Proceeds on issue of convertible bonds - 380.1
Dividends paid in the year (6.4) -
Net cash (used in) / generated from financing activities (370.3) 201.0
Net decrease in cash in the year (94.0) (336.3)
Cash and cash equivalents at beginning of year 1,047.5 1,379.0
Effect of foreign exchange rate changes 1.7 4.8
Cash and cash equivalents at end of year 955.2 1,047.5
Consolidated statement of changes in equity (UNAUDITED)
for the year ended 31 March 2023
Share Share premium Cash flow hedging reserve Cost of hedging reserve Other Retained earnings Total shareholders' equity
capital reserves
£m £m £m £m £m £m £m
Balance at 31 March 2021 2.7 19.8 (44.2) 0.8 (0.1) 985.2 964.2
Total comprehensive expense - - 199.4 (6.3) - (315.4) (122.3)
Share-based payments - - - - - 3.3 3.3
Issue of convertible bonds(1) - - - - 51.4 - 51.4
Balance at 31 March 2022 2.7 19.8 155.2 (5.5) 51.3 673.1 896.6
Total comprehensive income - - (170.5) (12.4) 3.9 290.8 111.8
Share-based payments - - - - - 10.4 10.4
Dividends paid in the year - - - - - (6.4) (6.4)
Balance at 31 March 2023 2.7 19.8 (15.3) (17.9) 55.2 967.9 1,012.4
( )
(1) In June 2021, senior unsecured convertible bonds were issued generating
gross proceeds of £387.4m. The equity component of these bonds was valued at
£51.4m 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 £3.8m at 31 March 2023.
Notes to the UNAUDITED PRELIMINARY ANNOUNCEMENT
for the year ended 31 March 2023
1. Accounting policies and general information
Basis of preparation
The financial information in this preliminary announcement has been prepared
and approved by the Board of Directors in accordance with UK-adopted
international accounting standards and applicable law ("UK-adopted IAS").
Whilst the information included in this preliminary announcement has been
prepared in accordance with UK-adopted IAS, the financial information
contained within this preliminary announcement for the years ended 31 March
2023 and 31 March 2022 does not itself contain sufficient information to
comply with UK-adopted IAS, nor does it comprise statutory financial
statements within the meaning of section 434 of the Companies Act 2006.
The financial information for 2022 is derived from the financial statements
for the year ended 31 March 2022, which have been delivered to the Registrar
of Companies. The Auditor has reported on the year ended 31 March 2022
financial statements; their report:
i. was unqualified.
ii. did not include a reference to any matters to
which the Auditor drew attention by way of emphasis without qualifying their
report; and
iii. did not contain a statement under section 498 (2)
or (3) of the Companies Act 2006.
The financial statements for the year ended 31 March 2023 will be finalised on
the basis of the financial information presented by the Board of Directors in
this preliminary announcement and will be delivered to the Registrar of
Companies in due course.
The 2023 Annual Report & Accounts (including the Auditor's Report) will be
made available to shareholders during the week commencing 7 August 2023. The
Jet2 plc Annual General Meeting will be held on 7 September 2023.
The financial information has been prepared under the historical cost
convention except for all derivative financial instruments, which have been
measured at fair value.
The Group's financial information is presented in pounds sterling and all
values are rounded to the nearest £100,000 except where indicated otherwise.
Going concern
The Directors have prepared financial forecasts for the Group, comprising
profit before and after taxation, balance sheets and cash flows through to 31
March 2026.
For the purpose of assessing the appropriateness of the preparation of the
Group's financial statements on a going concern basis, two financial forecast
scenarios have been prepared for the 12-month period following approval of
these financial statements:
· A base case which assumes a full unhindered flying programme
utilising an aircraft fleet of 120 at load factors above 90% against an 8%
increase in seat capacity; and
· A downside scenario with load factors reduced to 80% from August 2023
to reflect a possible reduction in demand but with no restrictions on flying
to any of the Group's destinations.
The forecasts consider the current cash position and an assessment of the
principal areas of risk and uncertainty as described in more detail in the
Group's Annual Report & Accounts, paying particular attention to the
impact of the current UK macro-economic environment and how this may affect
consumers' future spending.
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 during the forecast period.
The Directors concluded that, given the combination of a closing cash balance
(including money market deposits) of £2,624.7m at 31 March 2023 together with
the forecast monthly cash utilisation, under both scenarios the Group would
have sufficient liquidity throughout a period of 12 months from the date of
approval of the financial statements at the end of July 2023. In addition, the
Group is forecast to meet its RCF covenants at 30 September 2023 and 31 March
2024 under both scenarios with significant headroom.
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 financial statements. For this
reason, they continue to adopt the going concern basis in preparing the
financial statements for the year ended 31 March 2023.
Accounting policies
The accounting policies adopted are consistent with those described in the
Annual Report & Accounts for the year ended 31 March 2022.
2. 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. Segment
revenue reported below represents revenue generated from external customers.
Revenues for the Group can be further disaggregated by their nature for the
purposes of IFRS 15 as follows:
2023 2022
£m £m
Unaudited
Package holidays 4,028.9 887.9
Flight-only ticket revenue 570.3 160.3
Non-ticket revenue 421.5 147.0
Other Leisure Travel 12.8 36.5
Total revenue 5,033.5 1,231.7
3. Net operating expenses
2023 2022
£m £m
Unaudited
Direct operating costs:
Accommodation 1,973.6 473.5
Fuel 521.4 132.8
Landing, navigation and third-party handling 403.4 139.5
Agent commission 142.0 29.5
Maintenance 105.2 38.7
In-flight cost of sales 76.7 28.9
Carbon 76.7 11.0
Aircraft rentals (less than twelve months) 61.1 0.6
Other direct operating costs 190.1 53.6
Staff costs including agency staff 590.4 313.2
Depreciation of property, plant and equipment 118.9 105.2
Depreciation of right-of-use assets 66.3 53.1
Other operating charges 313.7 176.0
Total net operating expenses 4,639.5 1,555.6
4. Net financing expense
2023 2022
£m £m
Unaudited
Finance income 58.7 5.1
Interest expense on aircraft loans (16.4) (16.0)
Interest expense on other loans (7.1) (7.7)
Interest expense on convertible bond (17.3) (13.6)
Interest expense on lease liabilities (23.7) (21.2)
Finance expense (64.5) (58.5)
Net foreign exchange revaluation losses (19.8) (12.6)
Total net financing expense (25.6) (66.0)
5. Earnings per share
Basic earnings per share is calculated by dividing the profit / (loss)
attributable to the equity owners of the Parent Company by the weighted
average number of ordinary shares in issue during the year.
Diluted earnings per share is calculated by dividing the profit / (loss)
attributable to the equity owners of the Parent Company by the weighted
average number of ordinary shares in issue during the year, 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 year ended 31 March
2022, as they were anti-dilutive for that loss-making period.
2023 2022
Unaudited
Earnings Weighted average number of shares EPS Earnings Weighted average number of shares EPS
£m millions pence £m millions pence
Basic EPS
Profit / (loss) attributable to ordinary shareholders 290.8 214.7 135.4 (315.4) 214.6 (147.0)
Effect of dilutive instruments
Share options and deferred awards - 4.6 (2.8) - - -
Convertible bond 14.0 21.5 (6.0) - - -
Diluted EPS 304.8 240.8 126.6 (315.4) 214.6 (147.0)
6. 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.
EBITDA
Earnings before interest, tax, depreciation and amortisation (EBITDA) is
included as an alternative performance measure in order to aid users in
understanding the underlying operating performance of the Group.
These can be reconciled to the IFRS measure of profit / (loss) before taxation
as below:
2023 2022
£m £m
Unaudited
Profit / (loss) before taxation 371.0 (388.8)
Net FX revaluation losses 19.8 12.6
Profit / (loss) before FX revaluation and taxation 390.8 (376.2)
Net financing expense (excluding Net FX revaluation losses) 5.8 53.4
Depreciation of property, plant and equipment 118.9 105.2
Depreciation of right-of-use assets 66.3 53.1
EBITDA 581.8 (164.5)
'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.
2023 2022
£m £m
Cash and cash equivalents 955.2 1,047.5
Money market deposits 1,669.5 1,181.0
Cash and money market deposits 2,624.7 2,228.5
Deferred revenue (1,563.6) (1,189.1)
Trade and other receivables 66.0 44.4
'Own Cash' 1,127.1 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.
7. Market Abuse Regulation (MAR) Disclosure
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.
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. END FR UVRNROKUBRARRecent news on Jet2
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