REG - Jet2 PLC - Final Results
11/07/2024 07:00
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RNS Number : 9421V Jet2 PLC 11 July 2024
Jet2 plc
PRELIMINARY UNAUDITED RESULTS FOR YEAR ENDED 31 MARCH 2024
Jet2 plc, the Leisure Travel group (the "Group" or the "Company"), announces
its preliminary results for the year ended 31 March 2024.
Group financial highlights 2024 2023 Change
Unaudited
Revenue £6,255.3m £5,033.5m 24%
Operating profit £428.2m £394.0m 9%
Profit before FX revaluation and taxation† £520.1m £390.8m 33%
Profit before taxation £529.5m £371.0m 43%
Profit after taxation £399.2m £290.8m 37%
Basic earnings per share 185.9p 135.4p 37%
Final dividend per share 10.7p 8.0p 34%
† Further information on the calculation of this measure can be found in
Note 2.
* Further progress made against our growth strategy as the Group delivered
record passenger numbers, revenues and profitability and further strengthened
its balance sheet.
* The popularity of our holiday products contributed to Group profit before FX
revaluation and taxation increasing by 33% to £520.1m† (2023: £390.8m†).
* Total flown passengers grew 9% to 17.72m (2023: 16.22m); higher margin per
passenger package holiday customers rose 15% to 6.08m (2023: 5.29m),
representing 68.3% of total flown passengers (2023: 64.9%).
* Year-end total cash increased 21% to £3,184.7m (2023: £2,624.7m). 'Own
Cash'† (excluding advance customer deposits), was £1,331.4m (2023:
£1,127.1m), providing financial resilience and flexibility.
* In view of the positive financial performance and in keeping with its capital
allocation principles, the Board has resolved to pay a final dividend of 10.7p
per share (2023: 8.0p), an increase of 34%.
* Underlining our future confidence, the Group exercised its remaining Airbus
order purchase rights and now has a delivery stream of 146 firm ordered
A321neo aircraft delivering through to 2035.
* Our new Liverpool airport base is proving successful and operations from our
12(th) UK base at Bournemouth Airport will commence from February 2025.
* Summer 2024 on sale seat capacity is currently 12.3% higher than Summer 2023
at 17.16m seats. Booked to date Package Holiday customers are up 7%,
representing 72% of overall flown passengers, with Flight-Only passengers
increasing by 16%. Consequently average load factor is currently 73.4% (2023:
75.2%).
* Passengers are currently booking much closer to departure and therefore,
pricing for our flight-only and package holiday products must remain
attractive. Summer 2024 pricing to date for both products is showing a modest
increase, helping to offset in part previously announced input cost increases.
* As ever, we remain mindful of the current macro-economic and geo-political
environments and how these may influence future consumer spending patterns.
However, we continue to believe that the end-to-end package holiday is a
resilient and popular product which remains high on the priority list for our
Customers, even during uncertain economic times.
* Year to date the business is trading in line with management's expectations.
Given the late booking profile and the peak summer months of July, August and
September not yet complete, plus the majority of Winter 2024/2025 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 2025.
* 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. With our differentiated and attractive end-to-end
product, breadth of hotel choice and flexibility of duration, plus our
consistently high-quality Customer First approach, we are confident that
customers will continue to travel with us from our Rainy Island to the sun
spots of the Mediterranean, the Canary Islands and to European Leisure Cities.
Analyst and Investor call
The management team will host an investor and analyst conference call at
9.00am UK time, on Thursday, 11th July 2024. For dial-in details for the
conference call, please contact Burson Buchanan in advance to register:
Jet2@buchanan.uk.com (mailto:Jet2@buchanan.uk.com) .
Investor Presentation
The Investor Presentation will be available shortly on the Company's website:
www.jet2plc.com/en/company-reports (http://www.jet2plc.com/en/company-reports)
For further information please contact:
Jet2 plc 0113 239 7692
Steve Heapy, Chief Executive Officer
Gary Brown, Group Chief Financial Officer
Cavendish Capital Markets Limited Nominated Adviser 020 7220 0500
Katy Birkin
Camilla Hume
George Lawson
Canaccord Genuity 020 7523 8000
Joint Broker
Adam James
Harry Rees
Jefferies International Limited 020 7029 8000
Joint Broker
Ed Matthews
Jee Lee
Burson Buchanan 020 7466 5000
Financial PR
Richard Oldworth
Toto Berger
OUR CHAIRMAN'S STATEMENT
This is my first report as Chairman of Jet2 plc since Philip Meeson stepped
down last September. Having served on the Board since April 2020, this was a
position I felt privileged and delighted to take up. I would like to pay
tribute to Philip who oversaw remarkable growth as he carefully evolved and
nurtured the Company over four decades into what is a truly fantastic
people-orientated, customer-focused and financially sound business. As his
successor, I know we are all extremely appreciative that he continues to offer
the wealth of his experience and wisdom in his new role as Founder &
Adviser.
Strategic performance
Our strategy remains consistent: To be the UK's Leading and Best Leisure
Travel business. It was a challenging year for UK consumers with rising
inflation and elevated interest rates putting pressure on disposable income
levels. However, against this backdrop we made further progress on our growth
strategy, delivering record passenger numbers, revenues and profitability and
strengthening our balance sheet to underpin future growth and provide
financial resilience and flexibility.
Having successfully launched operations from Liverpool John Lennon Airport in
March 2024, we were delighted to announce another new base at Bournemouth
Airport where flying operations will commence from February 2025. This means
that more holidaymakers across the South of England will benefit from our
multi-award winning leisure flights and ATOL protected package holidays.
Our well capitalised balance sheet enabled the Group to continue to invest for
long-term growth, including the integration of a further six new Airbus
A321neo into our aircraft fleet, plus the launch of our Retail Operations
Centre ("ROC") in October 2023, the first of its kind in the UK aviation
industry - both will bring notable improvements to our Customer First
proposition.
In August 2023, we relaunched MyJet2, offering members tailored browsing,
exclusive discounts and rewards, a streamlined booking process, easy access to
key information, and excellent in-resort support via the app. MyJet2 enables
us to combine customer data points across sessions and devices, thus providing
members with their own personalised experience.
In the past year we welcomed over 5,000 new Colleagues to our business and
expanded our apprenticeship programme to include over 150 individuals who we
hope, in time, will become the bedrock of our future business.
Finally, we recently updated our Sustainability Strategy, with a series of
bold, clear and pragmatic actions on route to net zero by 2050, outlining an
emissions reduction pathway which will bring our 2035 carbon intensity in line
with the Science Based Targets initiative (SBTi) guidance. Importantly, the
strategy focuses on existing technologies and tangible actions that can be
taken currently, with a commitment to understanding and investing in emerging
technologies as appropriate.
Colleagues
Our most valuable assets at Jet2 are our Colleagues who embody our culture.
Personally, and on behalf of the Board, I would like to sincerely thank our
talented and dedicated teams who have supported the business through another
year of remarkable growth - every Colleague across the business has
contributed to our success. Their commitment to continually delivering an
exceptional customer experience is reflective of our People, Service, Profits
guiding principles, which I firmly believe underpin the continuing success of
our Leisure Travel business. Their tremendous efforts have resulted in our Net
Promoter Scores remaining in the high 60s and have also culminated in Jet2.com
and Jet2holidays being recognised as Which? Travel Brand of the Year for the
third consecutive year, an achievement we are immensely proud of.
Board
The Board continues to evolve to ensure it provides the appropriate skills and
experience to both support and challenge the executive management team. In
addition to Philip stepping down from the Board, in March 2024, Mark Laurence
retired following 14 years of loyal service. I would like to thank Mark for
his invaluable contribution and wish him well for the future. We also welcomed
three new independent Non-Executive Directors - Simon Breakwell, who has
become Chair of our Remuneration Committee; Angela Luger, who is our
Designated Non-Executive Director for Workforce Engagement; and Rachel
Kentleton, who is taking up the position of Chair of the Audit & Risk
Committee following the conclusion of the 2024 audit process. Their breadth of
experience will be invaluable in supporting the business through the next
phases of its development.
Financial Results
Group Revenue increased by 24% to £6,255.3m (2023: £5,033.5m). Group profit
before FX revaluation and taxation increased by 33% to £520.1m† (2023:
£390.8m†) and Group profit before taxation increased by 43% to £529.5m
(2023: £371.0m).
A strong balance sheet and ample liquidity are important attributes in this
industry, given its nature and capital intensity. As at 31 March 2024, our
cash and money market deposits† totalled £3,184.7m (2023: £2,624.7m) with
our 'Own Cash'† balance increasing to £1,331.4m (2023: £1,127.1m). Net
cash, stated after borrowings and lease liabilities increased by 38% to
£1,729.3m (2023: £1,249.7m). This financial capacity not only prepares us
for increasing gross capital expenditure (which is expected to approach
£5.0bn over the coming six years) and debt repayment commitments, but also
provides a solid foundation for those opportunities and challenges that the
current and future macro-economic environments may present.
Basic earnings per share increased 37% to 185.9p (2023: 135.4p).
Dividend
In view of the financial performance, our financial strength and continued
confidence in the Group's prospects, in line with its capital allocation
principles, the Board has resolved to pay a final dividend of 10.7p per share
(2023: 8.0p), representing an increase of 34%. This final dividend is subject
to shareholders' approval at the Company's Annual General Meeting on 5
September 2024 and will be payable on 23 October 2024 to shareholders on the
register at the close of business on 20 September 2024, with the ex-dividend
date being 19 September 2024.
Looking Ahead
I am extremely pleased with how our Leisure Travel business has performed in
the two years since the pandemic. Not only have we capitalised on the growth
opportunities presented, with the business having nearly doubled its pre-Covid
revenue, we have also remained true to our values of carefully investing to
secure our long-term growth aspirations, whilst ensuring we maintain financial
stability and flexibility.
With this in mind, and demonstrating our confidence in our future growth
plans, we recently exercised the remaining 36 purchase rights of our Airbus
aircraft order originally announced in late 2021, meaning we now have a firm
delivery stream of 146 A321neo aircraft through to 2035. This valuable
long-term order provides favourable operating cost efficiencies and enables us
to confidently plan for the long-term as we continue to expand our footprint
and the range of new and exciting destinations, ensuring we can continue to
delight our Customers for years to come. In addition, our People, Service,
Profits philosophy is timeless and actively guides our engagement with our
most valuable asset, our Colleagues. Combined, these qualities provide a
strong foundation to continue on our exciting journey in delivering on our
long-term strategy, To be the UK's Leading and Best Leisure Travel business.
___________________
Robin Terrell
Non-Executive Chairman
11 July 2024
† Further information on the calculation of these measures can be found in
Note 2.
OUR CEO'S STATEMENT
Results for the financial year
We are very pleased to have been able to report another year of strong
financial results as our Leisure Travel business delivered an improvement in
Group Revenue of 24% to £6,255.3m (2023: £5,033.5m) and an increase in Group
profit before FX revaluation and taxation of 33% to £520.1m† (2023:
£390.8m†).
These results underlined the popularity, resilience and flexibility of our
holiday products and also our leading brand position, as despite the
continuing inflationary pressures, millions of UK customers still chose to
prioritise their disposable income for a rejuvenating and relaxing Jet2
holiday!
For the reporting period, seat capacity increased 10% to 19.73m. Although
customer bookings were closer to departure, the business achieved a healthy
average load factor of 89.8% (2023: 90.5%) with growth in average pricing for
both our leisure travel products robust. Higher margin per passenger Package
Holiday customers grew 15% to 6.08m (2023: 5.29m) and were a materially higher
mix of total departing passengers at 68.3% (2023: 64.9%), with Flight-only
passengers reducing by 1% to 5.61m (2023: 5.69m).
The Group commits considerable investment in order to be well prepared for its
summer operations and Summer 2023 was no different, as we welcomed over 2,500
new Colleagues bringing the total number to over 15,000 at peak summer flying
activity.
Although the widespread aviation sector disruption experienced in Summer 2022
was not repeated, as always, we anticipated that there would be unpredictable
challenges posed by the external operating environment. As a Customer First
organisation, this means investing to embed sufficient resilience into our
operations, including but not limited to, standby aircraft and crews, generous
amounts of in-resort customer helpers, plus responsive 'go teams' in the event
of unforeseen developments. This proactive approach enabled us to effectively
navigate Summer 2023 events such as Rhodes (wildfires) and Skiathos
(flooding), the technological systems failure at NATS, together with the
record number of air traffic control strikes across Europe and mitigate the
impact on our Customers.
† Further information on the calculation of this measure can be found in
Note 2.
Our Strategy
To be the UK's Leading and Best Leisure Travel business
A holiday for most UK consumers is an experience that is eagerly anticipated
and, if provided in the right way, fondly remembered. Consequently, we are
passionate about end-to-end customer service and our investment decisions
focus primarily on how we can enrich our Customers' holiday experiences,
whether embarking on a Real Package Holiday from Jet2holidays®, or simply
enjoying a leisure flight with Jet2.com.
We know how much our Customers value their holidays as a stress-free and
refreshing break - a time to be looked after and to unwind with family and
friends, creating countless unforgettable positive memories. Consequently, our
unwavering commitment to a Customer First approach focuses on delivering
award-winning levels of service, where everybody is treated as a VIP. It is
this philosophy which has driven Jet2holidays to be the UK's largest package
holiday provider and Jet2.com to be the UK's 3rd largest airline by number of
passengers flown; underpins our high levels of repeat bookings and high Net
Promoter scores; and has seen both Jet2.com and Jet2holidays recently awarded
the coveted Which? Travel Brand of the Year for the third consecutive year.
Our long-term ambition remains as relevant today as it has always been: To be
the UK's Leading and Best Leisure Travel business, which demands a clear
strategic vision and an unfaltering customer focus, accompanied by consistent,
and often material, investment.
Our Commitment to Sustainability
Economically, socially and culturally, travel is a force for good and we are
extremely proud of our positive effect in the UK and in communities around the
world. However, it is also essential to recognise and act upon the
environmental impact associated with travel.
Our updated Sustainability Strategy published in May 2024 details how we are
taking bold, tangible actions on the journey to our Jet2 Net Zero 2050
commitment. It also reinforces our determination to embed sustainability
throughout our business (In the Air; On the Ground; and In Resort) and ensure
that Jet2 plc remains at the forefront of change in our industry.
We endeavour to operate in the most efficient manner possible, focusing on
minimising both emissions and carbon intensity (grammes of CO(2) emissions per
revenue passenger kilometre (gCO(2)/RPK)). It is pleasing to report that the
Group has continued to reduce its fuel burn gCO(2)/RPK from 65.9g in 2023 to
65.7g in the year ended 31 March 2024, representing positive progress towards
our 2035 carbon intensity reduction target.
Pleasingly, Jet2.com was also recognised with a platinum rating for airline
sustainability in the Centre for Aviation (CAPA) 2023 sustainability benchmark
report. This accolade saw us included in the top 10 airlines globally for
sustainability performance and ranked 4th out of 100 airlines for gCO(2)/RPK.
The Group has made further progress on its goal to embed the use of
Sustainable Aviation Fuel (SAF) into its operations. In 2024, Jet2.com will
use a 1% blend of SAF at London Stansted, Bristol and Malaga airports,
purchasing approximately 1,200 tonnes almost a year ahead of the UK and EU
governments' SAF mandates which are due to be introduced from January 2025. We
maintain our belief that SAF remains one of the most effective solutions for
reducing carbon emissions and is key to achieving net-zero status by 2050.
We took delivery of a further six new Airbus A321neo aircraft during the year
bringing the total to seven with all being powered by CFM Leap engines. In
addition, we recently exercised our remaining purchase rights with Airbus and
now have firm orders in place for an additional 139 A321neo aircraft, thereby
enabling Jet2.com and Jet2holidays to grow more sustainably over the next ten
years. These aircraft are already demonstrating their efficiency through a 20%
per seat reduction in fuel and carbon emissions, plus a 50% reduction in noise
footprint compared to the previous generation of narrow-body aircraft. In
addition, we have invested in aerodynamic split scimitar winglets for our
Boeing 737-800NG aircraft which we anticipate will reduce average fuel burn by
up to 1.8%.
Our actions on the ground mean over 50% of our Jet2.com-owned Ground Support
Equipment is now electrified, whilst in the air we have achieved an 83%
reduction in single-use plastics on our aircraft as compared to 2019.
Furthermore, in-resort Jet2holidays has implemented a Global Sustainable
Tourism Council accredited hotel sustainability labelling scheme with over 950
hotel partners engaged thus far, giving our Customers the ability to make more
sustainable accommodation choices.
In order for the industry to achieve Net Zero, we need a number of parties to
play their part, including aircraft and engine manufacturers, fuel producers
and, of course, the UK Government. Consequently, our specific asks from the UK
Government are to:
· Upscale the UK Government's investment in SAF;
· Ring-fence annual UK Emissions Trading Scheme revenues for
decarbonisation projects;
· Work multilaterally with governments across Europe to implement Air
Traffic Management reforms; and
· Support airport operators and remove obstacles around upgrades to
electrical infrastructure.
More detailed information on the Group's Sustainability Strategy can be found
at www.jet2plc.com/sustainability (http://www.jet2plc.com/sustainability) .
Operational Highlights
Retail Operations Centre
In October 2023, we were delighted to officially open our Retail Operations
Centre (ROC), the first of its kind in the UK aviation industry, which will
set new standards for Customer First service, efficiency and security. This
150,000 square foot facility, located in Middlewich, Cheshire, acts as a
centre to stock, manage and distribute millions of in-flight retail products
for customers to enjoy on their well-deserved leisure flights. The products
being managed include drinks and ambient food that can either be pre-ordered
or which feature in our in-flight menu, as well as products that can be bought
from our onboard shop, such as fragrances, beauty products, gifts and
duty-free.
The ROC facility employs cutting-edge x-ray scanners and security measures and
given the nature of the operation, it has undergone thorough examination to
ensure it complies with relevant regulations and has been approved by the UK
Civil Aviation Authority.
Since becoming fully operational in January 2024, Jet2.com's on-board stock
availability has improved materially on the levels achieved in previous years,
averaging over 98%, which in turn has improved customer satisfaction. It is
also pleasing that in a relatively short timeframe we have already realised
revenue benefits through increased spend per head. The Group has now commenced
the second phase of this initiative and in time expects to further optimise
its inflight revenue potential, combining leading edge automation with
customer data intelligence to create an improved, bespoke onboard retail
experience.
New Engineering Hangar
With our long-term aircraft delivery stream in mind, the Group acquired
additional premises at Manchester Airport to build a second aircraft
maintenance facility which is expected to be operational from late 2025. This
property, which is located next to our existing facility, gives us the
opportunity to further build our base maintenance capability and support our
growing aircraft fleet over the coming decade.
New UK Bases
Recognising the significant demand from both consumers and independent travel
agents across Liverpool, Merseyside and the wider region, we were pleased to
commence flying from Liverpool John Lennon Airport on 28 March 2024 with over
550,000 summer seats on sale. Our careful preparation ensured a seamless
launch, so that from day one we were able to provide customers with the same
award-winning service which has delighted millions of others across the UK for
so many years!
In addition, in late March 2024, we announced the launch of our award-winning
flights and holidays from Bournemouth Airport, our 12(th) UK base, providing
greater geographical reach across the South of England and reflecting our
long-term strategy to grow our successful business. Flights will commence from
February 2025 to many of our most popular destinations across the sun spots of
the Mediterranean and Canary Islands.
New Destinations
As always, we listen carefully to what our Customers tell us. Consequently, we
added Symi and Athens Coast to our Summer 2024 programme, the latter giving
customers access to eight popular resorts across the region, plus Portugal's
biggest city, Porto, steeped in history and combining vibrant city life with
beautiful coastal beaches.
We were also excited to announce that from Winter 2024/25 we have added
Morocco to our destinations, offering year-round sun-drenched holidays, city
breaks and flights to Marrakech and Agadir, plus the launch of a new Christmas
market destination - Gdansk.
Finally, for Summer 2025 we unveiled Pula on the Istrian Coast in Croatia,
offering holidaymakers everything from architectural gems and historic
monuments through to Blue Flag beaches, plus Costa de la Luz, a stunning,
authentic and untouched slice of Spain. Each of these new destinations provide
our Customers with an even greater choice of memory-making holiday
opportunities.
Our Stakeholders
Our Customers
For many families, booking a holiday is the most important purchase of the
year and a smooth customer journey from start to finish is paramount. We know
that each customer's purchasing habits are unique and consequently we continue
to offer four distinct booking channels through our website, mobile app,
contact centre and independent travel agents.
Human interaction remains important for many customers when making such an
important purchase, to ensure their individual needs are catered for.
Currently 9% of our Package Holiday customers book through our contact centre,
aided by friendly and informative homeworking sales colleagues who have an
intimate knowledge of our products. Once a booking has been made, our
pre-travel services team takes over, answering queries and ensuring that
customers are updated with post booking information, or provided with any
further pre-travel assistance as required.
Sales through travel agents remains an important distribution channel for the
business, and our package holidays can be booked through all major independent
travel agent chains, homeworker companies and independent agents.
Technology and how customers interact with it is perpetually evolving and our
websites and mobile app are continuously developed and refined to ensure that
the search and booking experience is as effortless and efficient as possible.
We have committed considerable resources to the growth of our digital channels
in order to provide customers with a best-in-class Jet2 mobile app experience.
This has resulted in a marked increase in the percentage of package holiday
customers now booking via the app of 21ppts since 2020 to 24%. We also took
the opportunity to relaunch our MyJet2 account, which already has over 4.0m
members. Having an account enables a seamless one-click access for customers
to proactively manage their bookings in one place; engagement through
competitions such as 'Bid for a Break'; and a personalised experience to
optimise booking conversion via exclusive discounts on both flights and
package holidays.
As it has grown, our Leisure Travel business has benefitted from its breadth
and quality of hotel choices, its family-focused approach and its Customer
First strategy, all of which are constantly refined to ensure our Customers
continue to enjoy memorable and relaxing holiday experiences. The agile nature
of our business model means we can adapt our offering to meet emerging
consumer trends such as increased demand for 'bucket list' style holidays to
natural wonders and unique cultures, which are perfectly suited to our
experiential 'Discover More' Jet2CityBreaks® and our Jet2holidays product.
It is immensely satisfying that the considerable investment made in our
industry-leading levels of customer care continues to be independently
recognised through a multitude of awards received for all our brands from
Which? and Feefo, together with our pre-eminent ranking on the UK Customer
Satisfaction Index. In addition, we were rated the best short-haul UK airline
for punctuality during 2023, according to analysis of Civil Aviation Authority
(CAA) data by the PA news agency. Our repeat customer booking rate for package
holidays of over 60% and net promoter scores in the high 60s for both Jet2.com
and Jet2holidays products are further clear indicators that customers truly
appreciate the quality of our product and our award-winning VIP customer
service.
As a result, we remain confident that our laser sharp focus on customer
service will continue to distinguish a holiday with Jet2 as an unparalleled
and market leading experience that customers choose time and again.
Our Colleagues
Our guiding principles of People, Service, Profits continue to influence the
way we engage and motivate our Colleagues - we firmly believe this underpins
our Customer First ethos.
Whether in the UK or Overseas, the ability of colleagues to continuously
demonstrate the Company's 'Take Me There' values (Be Present; Create Memories;
Take Responsibility; and Work As One Team), is of paramount importance. It is
this approach which has set us apart and enabled us to be consistently
recognised as an industry leader for outstanding customer service - great and
attentive customer service is where we aim to excel.
Throughout the year, our Colleagues worked tirelessly, responding admirably to
help navigate the many complex and unpredictable operational demands posed and
the Board is hugely appreciative of their tremendous support and efforts. It
is they who enable Jet2.com and Jet2holidays to fulfil the dreams of so many
customers, taking them on their well-deserved and eagerly anticipated
holidays.
We pride ourselves on doing the right thing for our Colleagues and to
recognise their invaluable contribution, we were pleased to award a pay
increase of 9% for the year ended 31 March 2024. We firmly believe that happy
and well-paid Colleagues are fundamental to our future success and, with this
and the pressures of elevated inflation levels in mind, we have awarded a
further generous increase of 5.5% for the year ending 31 March 2025,
representing a compound increase of over 24% since the end of the pandemic.
Having colleagues who are passionate about our business and able to share in
its success is a powerful quality. We were therefore pleased to build on the
success of our first ShareSave scheme, which had a take-up rate in excess of
60%, through a second offering in September 2023, again at a 20% discount to
the prevailing share price at inception, with a third offering imminent.
Furthermore, we are very pleased to be able to award both our Discretionary
Colleague Profit Share Scheme for non-management Colleagues and our
Discretionary Bonus Scheme for management Colleagues following the successful
operational and financial performance of the Group for the year ended 31 March
2024.
We recognise that achieving our future growth ambitions and maintaining our
industry-leading levels of customer care will not be possible without
appropriately skilled and experienced managerial colleagues who are empowered
to Take Responsibility for key decisions and to lead, support and inspire
their teams. Consequently, we have recently launched a new performance
management process - Maximising Business Performance through our People - to
directly link the contribution of each manager to their bonus reward for the
year ending 31 March 2025.
To further enhance the open channels of communication between our Colleagues
and the Board and ensure that their views can contribute towards our future
success, Angela Luger was appointed our Designated Non-Executive Director for
Workforce Engagement in April 2024.
The success of the Group, proven through the many customer satisfaction
accolades won, being awarded Best Large Company to work for at the Best
Workplaces in Travel awards, plus the long-term financial performance
achieved, demonstrates that our People, Service, Profits guiding principles
are bearing tangible benefits. Consequently, commensurate investment in our
Colleagues remains an enduring commitment of the Board.
Suppliers
We maintain constructive relationships with our suppliers through frequent
dialogue, coupled with our annual supplier conference which focuses 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 enter our peak Summer 2024 flying operation.
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
was again commendable, being 22.7 days (2023: 20.2 days) for Jet2.com Limited
and 24.6 days (2023: 22.7 days) for Jet2holidays Limited.
Shareholders
We maintain open lines of communication with our shareholders and
institutional investors, engaging with them appropriately through regular
interactions 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 have focused on the future of
sustainable air travel, together with the investigation into the disruption
created from the NATS failure in August 2023. Furthermore, I actively engage
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 frequent 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.
Outlook
Summer 2024 on sale seat capacity is currently 12.3% higher than Summer 2023
at 17.16m seats. Booked to date Package Holiday customers are up by 7%,
representing 72% of overall flown passengers, with Flight-Only passengers
increasing by 16%. Consequently average load factor is currently 73.4% (2023:
75.2%).
Passengers are currently booking much closer to departure and therefore,
pricing for our flight-only and package holiday products must remain
attractive. Summer 2024 pricing to date for both products is showing a modest
increase, helping to offset in part previously announced input cost increases.
As ever, we remain mindful of the current macro-economic and geo-political
environments and how these may influence future consumer spending patterns.
However, we continue to believe that the end-to-end package holiday is a
resilient and popular product which remains high on the priority list for our
Customers, even during uncertain economic times.
Year to date the business is trading in line with management's expectations.
Given the late booking profile and the peak summer months of July, August and
September not yet complete, plus the majority of Winter 2024/2025 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 2025.
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. With our differentiated and attractive end-to-end
product, breadth of hotel choice and flexibility of duration, plus our
consistently high quality Customer First approach, we are confident that
customers will continue to travel with us from our Rainy Island to the sun
spots of the Mediterranean, the Canary Islands and to European Leisure Cities.
____________________
Steve Heapy
Chief Executive Officer
11 July 2024
BUSINESS & FINANCIAL REVIEW
The Group's financial performance for the year ended 31 March 2024 is reported
in accordance with UK-adopted international accounting standards and
applicable law.
Summary Income Statement 2024 2023 Change
£m £m
Unaudited
Revenue 6,255.3 5,033.5 24%
Operating expenses (5,827.1) (4,639.5) (26%)
Operating profit 428.2 394.0 9%
Net financing income / (expense) (excluding Net FX revaluation gains / 88.6 (5.8) 1,628%
(losses))
Profit on disposal of property, plant and equipment 3.3 2.6 27%
Profit before FX revaluation and taxation 520.1 390.8 33%
Net FX revaluation gains / (losses) 9.4 (19.8) 147%
Profit before taxation 529.5 371.0 43%
Net financing (income) / expense (including Net FX revaluation (gains) / (98.0) 25.6 483%
losses)
Depreciation 248.8 185.2 (34%)
EBITDA* 680.3 581.8 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 2.
Customer Demand & Revenue
Our Leisure Travel business benefitted from consistent demand for Real package
holidays from Jet2holidays® and scheduled holiday flights from Jet2.com
throughout Summer 2023, although the latter months saw a more pronounced late
booking profile. In addition, we were pleased with the progress made in Winter
2023/24 as flown passengers increased 17.8% to 3.9m.
Having increased overall seat capacity for the year by 10% to 19.73m (2023:
17.93m), Jet2.com's average load factors remained healthy at 89.8% (2023:
90.5%).
The proportion of customers choosing our higher margin per passenger
end-to-end package holiday product increased 3.4ppts to 68.3% (2023: 64.9%),
underlining the appreciation of our industry-leading levels of Customer First
care together with the security that an ATOL licensed package holiday
provides. However, our flight-only product remains very important, offering
considerable flexibility as booking trends evolve and we were pleased that
flight-only passengers remained relatively steady at 5.61m (2023: 5.69m).
With little change in holiday booking trends and customer demand steady
although later, pricing for both products was robust which helped to cover the
many inflationary increases in our cost base. Flight-only net ticket yield per
passenger sector increased 14% to £114.23 (2023: £100.28) and the average
price of a Jet2holidays package holiday increased by 11% to £830 (2023:
£750)*.
Non-Ticket revenue per passenger sector increased by 1% to £26.34 (2023:
£25.99), driven by improved inflight retail spend from better product mix and
stock availability as compared to the supply issues suffered during Summer
2022. This was partially offset by lower flight-only hold baggage income due
to the increased package holiday mix (where hold bags are included in the
holiday price).
As a result, overall Group Revenue increased by 24% to £6,255.3m (2023:
£5,033.5m), equating to an increase of 14% in revenue per flown passenger to
£353 (2023: £310).
* The prior year average price of a package holiday has been restated and is
now net of government taxes. Further information on this can be found in Note
3.
Operating Expenses
Hotel accommodation costs increased 25% to £2,465.0m (2023: £1,973.6m)
primarily due to the growth in package holiday customers. However, supply-led
inflation, in particular on wages, food and energy costs which was partially
offset by the impact of slightly shorter duration holidays (averaging 7.6 days
versus 7.8 days last year) accounted for approximately 9% of the increase.
Despite our well established, proven hedging policy remaining consistent, fuel
and carbon costs combined increased by 34% to £803.7m (2023: £598.1m). This
rise was materially above the growth in flying activity, as geo-political
factors meant pricing in both commodity markets remained stubbornly high, with
the average cost of fuel and carbon allowances 24% and 19% higher respectively
than the prior year. In addition, from 1 January 2024, the EU Emissions
Trading Scheme exemption for return flights from the Canary Islands to the UK
was removed, which added a further 1% to the overall cost.
Landing, navigation and third-party handling increased 18% to £474.9m (2023:
£403.4m), outstripping flying activity growth due to average rate increases
of approximately 8% across UK and European bases, including increased charges
for new security systems, passengers with reduced mobility services and also
Eurocontrol flying fees.
Travel agents commission of £166.9m (2023: £142.0m) largely moved in line
with the increased volume of package holiday customers and the increase in
average package holiday price.
Maintenance costs rose by 44% to £152.0m (2023: £105.2m) as we operated
eight additional leased aircraft in Summer 2023, bringing total leased
aircraft, which have a higher maintenance rate per flying hour than owned
aircraft, to thirty. The balance was a function of higher costs associated
with the maintenance of Jet2.com's older aircraft which are nearing
retirement, plus the effect of a 6% strengthening of USD in the year.
Other direct operating costs increased 15% to £218.7m (2023: £190.1m), as
in-resort agents fees and ATOL costs increased primarily as a result of
package holiday volume growth but also due to supplier inflationary cost
increases, in particular on fuel for the provision of in-resort transfers to
and from hotels. These increases were offset by a significant reduction in
EU261 compensation on the prior year, as the wider aviation infrastructure
returned to stable operations.
Staff costs of £744.1m (2023: £590.4m) increased as a result of a 9% pay
award supporting the retention of happy and motivated colleagues amidst a
challenging inflationary environment. In addition, we implemented our
Lifestyle 2023 initiative for flight crew, an investment of approximately
£15m, aimed at improving roster stability and supporting a more balanced
lifestyle - pleasingly, feedback from our operational colleagues has been
positive. Finally, we incurred the full year effect of new starters from the
prior year and also invested in colleague recruitment and training to be
operationally resilient for the Summer 2024 season where seat capacity growth
is over 12%.
Brand and direct marketing investment was 26% higher than the previous year at
£264.2m (2023: £210.2m). Booked passengers increased 13%, higher than flown
passenger growth, as we pulled forward Summer 2024 customer bookings to
optimise load factor, with the remainder being partly inflation and partly mix
driven.
Other operating expenses increased 44% to £148.8m (2023: £103.5m), in
particular due to increased energy costs across our property infrastructure;
professional costs associated with strategic IT projects; upgrades of older IT
equipment, together with the indirect impact of increased headcount.
Total operating expenses increased by 26% to £5,827.1m (2023: £4,639.5m),
representing an increase of 15% in operating cost per flown passenger to £329
(2023: £286).
Operating profit
Overall Group operating profit increased 9% to £428.2m (2023: £394.0m),
which included approximately £14.0m of lost profitability from the broader
disruption caused by the NATS failure, Rhodes wildfires and flooding in
Skiathos as was widely reported. Consequently, operating profit per flown
passenger was flat at £24.
Net Financing Income
Net financing income (excluding Net FX revaluation gains) increased by £94.4m
to £88.6m (2023: £5.8m expense), primarily due to £159.5m (2023: £58.7m)
of finance income driven by higher levels of cash deposits coupled with
increases to bank interest rates made over the course of the financial year.
Finance expenses of £70.9m (2023: £64.5m) increased chiefly due to
additional interest incurred on lease liabilities as a result of aircraft
acquired to support capacity growth.
In addition, a net FX revaluation gain of £9.4m (2023: £19.8m loss) resulted
from the year end revaluation of foreign currency denominated monetary
balances.
Statutory Profit for the Year
As a result, Group statutory profit before taxation was £529.5m (2023:
£371.0m), an increase of 43% with profit per flown passenger increasing 30%
to £30 (2023: £23).
Taxation
The Group tax charge of £130.3m (2023: £80.2m) is made at an effective tax
rate of 25% (2023: 22%).
Statutory Net Profit for the year and Earnings Per Share
Consequently, Group statutory profit after taxation increased 37% to £399.2m
(2023: £290.8m) and basic earnings per share was 185.9p (2023: 135.4p).
Other Comprehensive Income and Expense
The Group had Other comprehensive income of £2.7m (2023: £179.0m expense),
with the expense in the prior year primarily driven by the transfer to the
consolidated income statement of hedged gains from in-the-money fuel
derivatives as at 31 March 2022.
Cash Flows and Financial Position
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 2024 2023 Change
£m £m
Unaudited
EBITDA 680.3 581.8 17%
Other Income Statement adjustments 11.4 7.8 46%
Operating cash flows before movements in working capital 691.7 589.6 17%
Movements in working capital 362.8 362.6 -
Interest and taxes 39.0 (0.1) -
Net cash generated from operating activities 1,093.5 952.1 15%
Purchase of property, plant and equipment, right-of-use assets and equity (410.0) (196.6) (109%)
investments
Movement on borrowings 17.7 (287.7) 106%
Movement on lease liabilities (116.5) (76.2) (53%)
Dividends paid in the year (25.8) (6.4) (303%)
Other items 1.1 11.0 (90%)
Net increase in cash and money market deposits ((a)) 560.0 396.2 41%
(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 2.
Net Cash Generated From Operating Activities
The Group generated operating cash inflows before working capital movements of
£691.7m (2023: £589.6m) primarily driven by the strong trading performance
which resulted in EBITDA improving to £680.3m (2023: £581.8m).
Movements in working capital, in particular on advance customer cash receipts
and supplier payments, resulted in cash inflows of £362.8m (2023: £362.6m).
The higher interest rate environment combined with higher average cash
balances resulted in an increase in net finance income received to £84.2m
(2023: £15.1m). After having utilised a proportion of the deferred tax asset
in respect of losses incurred during the Covid pandemic, Corporation tax
payments were £45.2m (2023: £15.2m). Overall, the Group generated £1,093.5m
of cash from its operating activities (2023: £952.1m), an increase of 15%.
Net Cash Used In Investing Activities
Total capital expenditure amounted to £408.0m (2023: £196.6m) primarily
representing balance payments for six Airbus A321neo aircraft delivered during
the year, together with pre-delivery payments for future arrivals.
Additionally, we continued to invest in the ongoing maintenance of our
existing aircraft fleet, ensuring its long-term reliability and performance.
This investment included a programme to upgrade winglets to split scimitars on
our Boeing 737-800NG fleet, aiding a reduction in both fuel and carbon
emissions.
Furthermore, we invested in our new ROC to take full control of Jet2.com's
inflight logistics operation. The facility, which is fully operational,
provides inflight ambient products for ten of our eleven UK bases. The Group
has now commenced the second phase of this initiative, investing in world
leading automation equipment which will offer further benefits from 2025 and
beyond.
Purchase of equity investments of £2.0m represented our initial investment in
the Fulcrum NorthPoint facility, being developed by Fulcrum BioEnergy Ltd,
securing Jet2.com's access to sustainable aviation fuel which is planned to be
produced by this facility from 2028.
Net Cash Used In Financing Activities
Net cash used in financing activities amounted to £124.6m (2023: £370.3m)
including repayments of borrowings and lease liabilities of £289.5m (2023:
£363.9m), offset by loans advanced of £190.7m (2023: £nil) for new aircraft
deliveries in the period.
Dividend payments of £25.8m (2023: £6.4m) reflected the resumption of a
final dividend payment of 8.0p per share for the previous year's financial
performance, together with the payment of an interim dividend of 4.0p per
share (2023: 3.0p).
Other items totalling an inflow of £1.1m (2023: £11.0m) include £3.3m of
proceeds from retired aircraft and engine sales (2023: £2.7m) offset by the
effect of foreign exchange rate changes on the Group's cash and money market
deposit balances which totalled a £2.2m loss (2023: £8.3m gain).
Overall, this resulted in a net cash inflow of £560.0m (2023: £396.2m) and a
year-end total cash and money market deposits position† of £3,184.7m (2023:
£2,624.7m). Net cash, stated after borrowings and lease liabilities increased
by 38% to £1,729.3m (2023: £1,249.7m).
At the reporting date, the Group had received payments in advance of travel
from customers amounting to £1,853.3m (2023: £1,497.6m) and had increased
its 'Own Cash'† balance to £1,331.4m (2023: £1,127.1m).
† Further information on the calculation of this measure can be found in
Note 2.
Liquidity
The Group maintains a robust financial position, characterised by a strong
balance sheet offering ample liquidity to pursue our growth aspirations at a
healthy return on capital, to refresh certain of our less efficient aircraft
fleet and to comfortably repay our debt obligations. These resources also
provide financial resilience and flexibility to navigate potential challenges
should they arise.
Consequently, we were able to purchase a number of the A321neo aircraft
delivered during the year through our Own Cash reserves. In addition, we
repaid the final instalments of debt acquired during the pandemic of £82.2m
which was secured against twelve Boeing 737-800NG midlife aircraft. We also
took the opportunity to prepay remaining debt obligations secured against
three Boeing 737-800NG aircraft of £41.2m, this debt having been acquired
between 2016 and 2019 at a higher funding cost than the Group can currently
access in aircraft financing markets.
In October 2023, the Group successfully extended its sustainability-linked
Revolving Credit Facility (RCF) by a further year through to 19 October 2027,
on the same commercial terms with its four supportive relationship banks:
Barclays Bank plc; HSBC UK Bank plc; Lloyds Bank plc; and National Westminster
Bank plc.
Summary Statement of Financial Position 2024 2023 Change
£m £m
Unaudited
Non-current assets ((a)) 1,858.4 1,519.8 22%
Net liabilities ((b)) (101.6) (115.0) 12%
Cash and money market deposits 3,184.7 2,624.7 21%
Deferred revenue (1,926.6) (1,563.6) (23%)
Borrowings (755.8) (729.2) (4%)
Lease liabilities (699.6) (645.8) (8%)
Deferred taxation (110.1) (36.7) (200%)
Derivative financial instruments (40.5) (41.8) 3%
Total shareholders' equity 1,408.9 1,012.4 39%
(a) Stated excluding derivative financial instruments and trade and other
receivables.
(b) Stated excluding cash and cash equivalents, money market deposits,
deferred revenue, borrowings, lease liabilities and derivative financial
instruments.
Total shareholders' equity increased by £396.5m (2023: £115.8m) which
included profit after taxation of £399.2m (2023: £290.8m) which was
partially offset by dividends paid of £25.8m (2023: £6.4m).
In any sector, being recognisably differentiated is an important quality - in
a sector that is providing an experiential consumer product this is vital.
Consequently, we recognise that a well-capitalised balance sheet allowing
sustained levels of investment to stay ahead of the competition is paramount.
This investment in aircraft, product, brand and customer service excellence,
plus the delivery of a differentiated and attractive end-to-end product which
pleases customers from start to finish, engenders loyalty and repeat bookings
- meaning a better quality of recurring revenue and profitability - a great
platform in our aim To be the UK's Leading and Best Leisure Travel business.
___________________________
Gary Brown
Group Chief Financial Officer
11 July 2024
Leisure Travel Key Performance Indicators 2024 2023 Change
Unaudited
Seat capacity 19.73m 17.93m 10%
Flown passengers 17.72m 16.22m 9%
Load factor 89.8% 90.5% (0.7 ppts)
Flight-only passengers 5.61m 5.69m (1%)
Package holiday customers 6.08m 5.29m 15%
Package holiday customers % of total flown passengers 68.3% 64.9% 3.4ppts
Flight-only ticket yield per passenger sector (excl. taxes) £114.23 £100.28 14%
Average Package holiday price* £830 £750 11%
Non-ticket revenue per passenger sector £26.34 £25.99 1%
Fuel requirement hedged - next 12 months 81.7% 81.8% (0.1 ppts)
Advance sales made as at 31 March £3,720.0m £3,028.2m 23%
* The prior year price of a package holiday has been restated and is now net
of government taxes. Further information on this can be found in Note 3.
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.
COnsolidated income statement (unaudited)
for the year ended 31 March 2024
Results for the Results for the
year ended year ended
31 March 2024 31 March 2023
£m £m
Revenue 3 6,255.3 5,033.5
Operating expenses 4 (5,827.1) (4,639.5)
Operating profit 428.2 394.0
Finance income 159.5 58.7
Finance expense (70.9) (64.5)
Net FX revaluation gains / (losses) 9.4 (19.8)
Net financing income / (expense) 98.0 (25.6)
Profit on disposal of property, plant and equipment 3.3 2.6
Profit before taxation 529.5 371.0
Taxation (130.3) (80.2)
Profit for the year 399.2 290.8
(all attributable to equity shareholders of the Parent)
Earnings per share
- basic 5 185.9p 135.4p
- diluted 5 170.4p 126.6p
Consolidated statement of comprehensive income (UNAUDITED)
for the year ended 31 March 2024
Year ended Year ended
31 March 31 March
2024 2023
£m £m
Profit for the year 399.2 290.8
Other comprehensive income / (expense)
Items that are or may be reclassified subsequently to profit or loss:
Cash flow hedges:
Fair value losses (53.9) (49.4)
Net amount transferred to Consolidated Income Statement 65.3 (164.1)
Cost of hedging reserve movement (5.3) (17.0)
Related taxation (charge) / credit (1.5) 47.6
Revaluation of foreign operations (1.9) 3.9
2.7 (179.0)
Total comprehensive income for the year 401.9 111.8
(all attributable to equity shareholders of the Parent)
Consolidated Statement of Financial Position (UNAUDITED)
at 31 March 2024
2024 2023
£m £m
Non-current assets
Intangible assets 26.8 26.8
Property, plant and equipment 1,193.2 927.7
Right-of-use assets 636.4 565.3
Trade and other receivables 21.2 -
Derivative financial instruments 17.3 14.3
Other equity investment 2.0 -
1,896.9 1,534.1
Current assets
Inventories 124.8 40.2
Trade and other receivables 332.8 281.3
Derivative financial instruments 30.8 45.8
Money market deposits 1,745.1 1,669.5
Cash and cash equivalents 1,439.6 955.2
3,673.1 2,992.0
Total assets 5,570.0 4,526.1
Current liabilities
Trade and other payables 477.4 339.1
Deferred revenue 1,903.9 1,547.2
Borrowings 44.6 125.9
Lease liabilities 131.0 101.8
Provisions 63.2 57.4
Derivative financial instruments 83.0 85.1
2,703.1 2,256.5
Non-current liabilities
Deferred revenue 22.7 16.4
Borrowings 711.2 603.3
Lease liabilities 568.6 544.0
Provisions 39.8 40.0
Derivative financial instruments 5.6 16.8
Deferred taxation 110.1 36.7
1,458.0 1,257.2
Total liabilities 4,161.1 3,513.7
Net assets 1,408.9 1,012.4
Shareholders' equity
Share capital 2.7 2.7
Share premium 19.8 19.8
Cash flow hedging reserve (6.7) (15.3)
Cost of hedging reserve (21.9) (17.9)
Other reserves 53.3 55.2
Retained earnings 1,361.7 967.9
Total shareholders' equity 1,408.9 1,012.4
consolidated statement of cash flows (UNAUDITED)
for the year ended 31 March 2024
2024 2023
£m £m
Profit before taxation 529.5 371.0
Net financing (income) / expense (including Net FX revaluation (gains) / (98.0) 25.6
losses)
Depreciation 248.8 185.2
Profit on disposal of property, plant and equipment (3.3) (2.6)
Equity settled share-based payments 14.7 10.4
Operating cash flows before movements in working capital 691.7 589.6
Increase in inventories (84.6) (31.7)
Increase in trade and other receivables (55.7) (117.5)
Increase in trade and other payables 134.5 118.7
Increase in deferred revenue 363.0 374.5
Increase in provisions 5.6 18.6
Cash generated from operations 1,054.5 952.2
Interest received 139.7 58.7
Interest paid (55.5) (43.6)
Income taxes paid (45.2) (15.2)
Net cash generated from operating activities 1,093.5 952.1
Cash used in investing activities
Purchase of property, plant and equipment (403.9) (193.9)
Purchase of right-of-use assets (4.1) (2.7)
Purchase of equity investment (2.0) -
Proceeds from sale of property, plant and equipment 3.3 2.7
Net increase in money market deposits (75.6) (481.9)
Net cash used in investing activities (482.3) (675.8)
Cash used in financing activities
Repayment of borrowings (173.0) (287.7)
New loans advanced 190.7 -
Payment of lease liabilities (116.5) (76.2)
Dividends paid in the year (25.8) (6.4)
Net cash used in financing activities (124.6) (370.3)
Net increase / (decrease) in cash in the year 486.6 (94.0)
Cash and cash equivalents at beginning of year 955.2 1,047.5
Effect of foreign exchange rate changes (2.2) 1.7
Cash and cash equivalents at end of year 1,439.6 955.2
Consolidated statement of changes in equity (UNAUDITED)
for the year ended 31 March 2024
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 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
Total comprehensive income - - 8.6 (4.0) (1.9) 399.2 401.9
Share-based payments - - - - - 14.7 14.7
Deferred tax on share-based payments - - - - - 5.7 5.7
Dividends paid in the year - - - - - (25.8) (25.8)
Balance at 31 March 2024 2.7 19.8 (6.7) (21.9) 53.3 1,361.7 1,408.9
( )
(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 £1.9m at 31 March 2024 (2023: £3.8m).
Notes to the UNAUDITED PRELIMINARY ANNOUNCEMENT
for the year ended 31 March 2024
1. Accounting policies and general information
General information
Jet2 plc is a public limited company incorporated and domiciled in England and
Wales. The Company's ordinary shares are traded on AIM. The address of its
registered office is Low Fare Finder House, Leeds Bradford Airport, Leeds,
LS19 7TU.
The Group's preliminary announcement consolidates the financial statements of
Jet2 plc and its subsidiaries.
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 for the
years ended 31 March 2024 and 31 March 2023 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 2023 is derived from the financial statements
for the year ended 31 March 2023, which have been delivered to the Registrar
of Companies. The Auditor has reported on the year ended 31 March 2023
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 2024 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 2024 Annual Report & Accounts (including the Auditor's Report) will be
made available to shareholders during the week commencing 5 August 2024. The
Jet2 plc Annual General Meeting will be held on 5 September 2024.
The financial information has been prepared under the historical cost
convention except for all derivative financial instruments and other equity
investments, which have been measured at fair value. The accounting policies
adopted are consistent with those described in the Annual Report &
Accounts for the year ended 31 March 2023.
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 2027.
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 127 at load factors above 90% against a 13% increase in seat
capacity; and
· A downside scenario with load factors reduced to 80% from August 2024 to
reflect a material reduction in demand or the occurrence of operationally
disruptive events and a lack of available funding for new aircraft during this
period.
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.
In addition to forecasting the cost base of the Group, the base case scenario
incorporates the funding of future aircraft deliveries with our
well-established aircraft financing partners and both scenarios reflect no
mitigating actions taken to defer uncommitted capital expenditure during the
forecast period.
The Directors concluded that, given the combination of a closing total cash
and money market deposits balance of £3,184.7m at 31 March 2024 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 2024. In addition, the
Group is forecast to meet its RCF covenants at 30 September 2024 and 31 March
2025 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 2024.
2. 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 before FX revaluation and taxation
Profit 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 before taxation as
below:
2024 2023
£m £m
Unaudited
Profit before taxation 529.5 371.0
Net FX revaluation (gains) / losses (9.4) 19.8
Profit before FX revaluation and taxation 520.1 390.8
Net financing (income) / expense (excluding Net FX revaluation (gains) / (88.6) 5.8
losses)
Depreciation of property, plant and equipment 135.8 118.9
Depreciation of right-of-use assets 113.0 66.3
EBITDA 680.3 581.8
'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.
2024 2023
£m £m
Unaudited
Cash and cash equivalents 1,439.6 955.2
Money market deposits 1,745.1 1,669.5
Cash and money market deposits 3,184.7 2,624.7
Deferred revenue (1,926.6) (1,563.6)
Trade and other receivables 73.3 66.0
'Own Cash' 1,331.4 1,127.1
Trade and other receivables relates to invoicing of amounts due from travel
agents in respect of package holiday deposits and balance payments.
3. 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 as
follows:
2024 2023
£m £m
Unaudited Restated
Package holidays 5,046.4 3,969.7
Flight-only ticket revenue 634.9 556.7
Non-ticket revenue 466.8 421.5
Other Leisure Travel 107.2 85.6
Total revenue 6,255.3 5,033.5
The comparative disaggregation of revenue has been restated to disclose
Package holidays revenue net of £59.2m government taxes (consistent with the
measurement of that revenue) and to disclose Flight-only ticket revenue after
deducting compensation payments (up to the full value of the related ticket
price) of £13.6m. Previously these amounts were deducted from Other Leisure
Travel revenue. Comparative Package holidays revenue has reduced from
£4,028.9m to £3,969.7m, Flight-only ticket revenue has reduced from £570.3m
to £556.7m and Other Leisure Travel revenue has increased from £12.8m to
£85.6m. There is no change to the total revenue reported.
4. Operating expenses
2024 2023
£m £m
Unaudited
Direct operating costs:
Accommodation 2,465.0 1,973.6
Fuel 697.4 521.4
Landing, navigation and third-party handling 474.9 403.4
Agent commission 166.9 142.0
Maintenance 152.0 105.2
Carbon 106.3 76.7
In-flight cost of sales 92.6 76.7
Aircraft rentals (less than 12 months) 47.4 61.1
Other direct operating costs 218.7 190.1
Staff costs including agency staff 744.1 590.4
Marketing costs 264.2 210.2
Depreciation of property, plant and equipment 135.8 118.9
Depreciation of right-of-use assets 113.0 66.3
Other operating expenses 148.8 103.5
Total operating expenses 5,827.1 4,639.5
5. Earnings per share
Basic earnings per share is calculated by dividing the profit 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 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.
2024 2023
Unaudited
Earnings Weighted average number of shares EPS Earnings Weighted average number of shares EPS
£m millions pence £m millions pence
Basic EPS
Profit attributable to ordinary shareholders 399.2 214.7 185.9 290.8 214.7 135.4
Effect of dilutive instruments
Share options and deferred awards - 5.7 (4.8) - 4.6 (2.8)
Convertible bond 13.4 21.7 (10.7) 14.0 21.5 (6.0)
Diluted EPS 412.6 242.1 170.4 304.8 240.8 126.6
6. Notes to Consolidated Statement of Cash Flows
Changes in cash and financing liabilities Cash and cash equivalents Money market deposits Borrowings Lease liabilities Total
Net cash / (debt)
£m £m £m £m £m
At 1 April 2023 955.2 1,669.5 (729.2) (645.8) 1,249.7
Repayment of borrowings - - 173.0 - 173.0
New loans advanced - - (190.7) - (190.7)
Payment of lease liabilities - - - 116.5 116.5
Total changes from financing cash flows - - (17.7) 116.5 98.8
Other cash flows 562.2 - - - 562.2
Deposit placements (2,157.1) 2,157.1 - - -
Deposit receipts 2,081.5 (2,081.5) - - -
Exchange differences (2.2) - 3.4 9.7 10.9
Unwind of interest(1) - - (12.3) - (12.3)
Lease movements(2) - - - (180.0) (180.0)
At 31 March 2024 1,439.6 1,745.1 (755.8) (699.6) 1,729.3
(1) Unwind of interest relates to the discount rates applied on receipt of the
convertible bond and amortisation of transaction costs associated with
Borrowings and Lease liabilities.
(2) Lease movements include new leases and lease term amendments.
7. Post Balance Sheet Events
On 19 April 2024, Jet2 plc opted to repay £87.9m in respect of balances owed
on finance secured against six Boeing 737-800NG aircraft ahead of their
maturity date using the Group's Own Cash reserves.
In June 2024, the Group exercised the remaining 36 purchase rights of its
aircraft order with Airbus, an order which was originally announced in late
2021, meaning that the Group now has 146 firm ordered A321neo aircraft of
which seven had been delivered as at 31 March 2024.
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