REG - Jet2 PLC - Half-year Report
21/11/2024 07:00
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RNS Number : 0266N Jet2 PLC 21 November 2024
Jet2 plc
Interim Results for the half year ended 30 September 2024
Another record performance with full year outlook upgraded
Group financial highlights (unaudited) HY25 HY24 % change
Revenue £5,085.4m £4,407.4m 15%
Operating profit £701.5m £617.0m 14%
Profit before FX revaluation and taxation* £772.4m £664.6m 16%
Profit before taxation £791.4m £660.5m 20%
Profit for the period after taxation £592.9m £496.0m 20%
Basic earnings per share 279.3p 231.0p 21%
Interim dividend per share 4.4p 4.0p 10%
· Further strong progress made against our growth strategy as the Group
delivered another record performance in terms of passenger numbers, revenues
and profitability.
· Strong financial performance as Group operating profit increased 14% to
£701.5m and Group profit before foreign exchange revaluation and taxation*
increased 16% to £772.4m.
· Total cash and money market deposits increased 12% to £3,596.4m (2023:
£3,214.6m). Own Cash* (excluding customer deposits) increased 9% to
£2,318.3m (2023: £2,121.2m), providing a solid foundation for the increasing
gross capital expenditure in new aircraft fleet over the coming years.
· Ten new Airbus A321neo aircraft received and in service. Investment continues
in infrastructure and technology to improve our Customer First product
proposition and support our growth ambitions.
· Winter 2024/25 on sale seat capacity is currently 14% higher than Winter
2023/24 at 5.11m seats. The closer to departure, later booking profile
experienced during Summer 2024 has continued. Average pricing to date is
displaying a modest increase for our package holiday product, with flight-only
slightly ahead.
· With a material amount of the Winter 2024/25 season still to sell, we are
currently on track to deliver Group profit before FX revaluation and taxation
for the year ending 31 March 2025 ahead of market expectations(‡), assuming
no material extraneous events in the remainder of the financial year.
· Summer 2025, on sale capacity of 18.74m seats is approximately 9% higher than
Summer 2024, including our new UK bases at Bournemouth and London Luton
airports. Bookings and pricing at this very early stage are in line with
management expectations.
Steve Heapy, Jet2 plc Chief Executive Officer, commented:
"We are delighted to have delivered another record financial performance
during the first half of the year. This result continues to demonstrate that
our end-to-end package holidays and scheduled holiday flights, underpinned by
our Customer First approach, remain popular and resilient products.
I would also like to thank our amazing Colleagues who have helped deliver this
result and who are ambassadors of our People, Service, Profits guiding
principles and who continue to deliver award winning, sector leading customer
service on a daily basis.
Even in difficult economic times, the annual overseas holiday remains a highly
valued and eagerly anticipated experience, often taking precedence over other
discretionary spend. As a result, we are confident that our proven business
model - anchored to delivering a fantastic customer service with a
well-established, trusted holiday brand - offers customers a compelling value
proposition. With our extensive product range, appealing flight times and
truly variable duration holidays, customers have plenty of choice and
flexibility to be able to tailor their holiday plans to meet their individual
budgets."
* Further information on the calculation of this measure can be found in Note 3.
(‡) Based on Company compiled consensus, the Board believes the current average
market expectations for Group profit before FX revaluation and taxation for
the year ending 31 March 2025 to be £541m.
Analyst and Investor call
The management team will host an investor and analyst conference call at
9.00am UK time, on Thursday, 21st November 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)
STRATEGIC AND OPERATIONAL UPDATE
Results for the half year
We are very pleased to report another record financial performance as the
business delivered a 14% increase in Group operating profit to £701.5m (2023:
£617.0m) and a 16% increase in Group profit before foreign exchange
revaluation and taxation to £772.4m (2023: £664.6m). This result underlines
the popularity, flexibility, resilience and continuing momentum of our
Customer First product offering. Consequently, basic earnings per share
increased 21% to 279.3p (2023: 231.0p).
For the reporting period, seat capacity increased by 13% to 14.85m (2023:
13.20m), with Jet2.com flying 13.34m passenger sectors (2023: 11.97m).
Passenger demand was characterised by a higher proportion than usual booking
much closer to their departure date, meaning pricing for both our package
holiday and flight-only leisure travel products needed to remain consistently
attractive.
Our higher absolute margin per passenger package holiday customers increased
by 8% to 4.67m (2023: 4.31m) reinforcing Jet2holidays' position as the UK's
leading tour operator and representing 69.2% of the total mix of flown
passengers (2023: 70.8%). Average package holiday pricing remained resilient,
growing by 6% to £904 (2023: £855) as supply-led inflationary increases were
passed on.
Pleasingly, appetite for our shorter lead time flight-only product also
increased by 18% to 4.11m passengers (2023: 3.49m). While Flight-only ticket
yield per passenger sector declined by 1% to £130.81 (2023: £131.71†),
total margin gained from the strong late demand more than offset this slight
price decrease.
As is typical for the Group, losses are to be expected in the second half of
the financial year, as we continue to invest in:
· additional aircraft to support seat capacity growth of approximately 9% for
Summer 2025;
· marketing to ensure we optimise our pre-Summer 2025 forward booking position;
· Sustainable Aviation Fuel (SAF) in line with the UK and EU Governments'
mandates of a minimum 2% blend in the jet fuel supply from 1 January 2025;
· retaining sufficient operational colleagues through the winter months to
ensure appropriate resilience ahead of Summer 2025; and
· attracting new colleagues in readiness for further expansion of our exciting
package holiday and flight-only offerings, including at our new UK bases at
Bournemouth and London Luton airports where operations commence in February
and April 2025 respectively.
In addition, the final quarter will not benefit from last year's early Easter,
making the prior year comparatives more challenging.
† The prior year Flight-only ticket yield per passenger sector and
Non-ticket revenue per passenger sector have been restated. Further
information on this can be found in Note 4.
Interim Dividend
In view of the half year financial performance, the current full year outlook,
its continued confidence in the Group's prospects and in line with its capital
allocation principles, the Board has resolved to pay an interim dividend of
4.4p per share (2023: 4.0p). The dividend will be paid on 7 February 2025 to
shareholders on the register at 3 January 2025, with the ex-dividend date
being 2 January 2025.
Operational Highlights
Our Commitment to Sustainability
In May 2024, the Group updated its Sustainability Strategy, with a series of
bold, clear and pragmatic actions throughout our business (In the Air; On the
Ground; and In Resort) on our path to net zero by 2050. We recently submitted
our plans to the Science Based Targets initiative (SBTi) for external review
and validation, demonstrating our commitment to deliver a 35% carbon intensity
reduction by 2035. We were also pleased to receive ISO 14001 accreditation
recently, meaning that Jet2's approach to sustainability has been certified to
the internationally recognised standard for environmental management.
During 2024, Jet2.com used 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 due to be introduced from January
2025. In addition, we continued to support our hotel partners on their journey
towards becoming independently certified as sustainable - we now proudly offer
over 1,200 hotels as part of our Certified Sustainable Hotels collection,
giving our Customers the ability 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) .
Aircraft Fleet
In June 2024, we exercised the remaining 36 purchase rights of our A321neo
aircraft order with Airbus. Consequently, the Group now has 146 firm ordered
A321neo aircraft with CFM engines delivering through to 2035, of which 10 have
been received to date in line with our delivery schedule. In addition, we have
secured a further 9 new A321neo leased aircraft from third party lessors
delivering between November 2024 and mid-2026. The Group currently expects to
receive a combined total of 14 aircraft across its owned and leased fleets by
December 2025.
The final 6 of our Boeing 757-200 aircraft will leave the fleet during Winter
2024/25 as Jet2.com continues to retire older, less efficient aircraft. The
new A321neo aircraft benefit from approximately 20% more seats than our
average fleet size and superior fuel efficiency (and resultant reduced carbon
emissions per seat), which will play an important part in enabling us to
achieve our Jet2 Net Zero 2050 pledge. In addition, the aircraft is also much
quieter, having a noise footprint approximately 50% smaller than older models
in its class.
This significant long-term investment ensures certainty of aircraft supply
well into the next decade, underpinning our growth and fleet modernisation
ambitions.
Award-winning customer service
Jet2holidays is the UK's largest tour operator and is ATOL-licenced for over 7
million customers, representing over 21% of total ATOL licences issued at 1
October 2024. The bedrock of this large operation are our amazing Colleagues,
who consistently deliver our market leading customer experience and are
reflective of our People, Service, Profits guiding principles.
The importance of a seamless disruption-free holiday experience for our
Customers cannot be under-estimated, which is why any flight cancellations
remain limited to exceptional circumstances. This industry-leading approach
resulted in a cancellation rate of 0.07% during the period across our
operation of over 75,000 flights.
Building on our high trust ratings on Which?, TripAdvisor and Trustpilot and
our recognition as the leading airline and holiday company on the UK Customer
Satisfaction Index (UKCSI), our Customer First approach has continued to be
acknowledged as we were awarded European Airline of the Year at the recent
Airline Economics Aviation 100 Awards. Furthermore, our repeat customer
booking rate for package holidays of 60% and consistently high overall net
promoter scores, in the 60s for Jet2.com and Jet2holidays products
respectively, are clear indicators that Customers truly appreciate the quality
of our product and our award-winning VIP customer service.
New UK Bases
Meticulous preparation ahead of the start of our operations from Liverpool
John Lennon Airport resulted in a seamless launch on 28 March 2024, with over
215,000 passengers having departed from Liverpool to their holiday
destinations so far! Pleasingly, the strong customer demand from the wider
Merseyside region has been followed by very positive feedback for our Real
Package Holidays from Jet2holidays®, and leisure flights with Jet2.com. We
are delighted to have a fifth aircraft based at Liverpool for Summer 2025,
which will allow us to grow our capacity to 720,000 seats.
In addition, we were delighted to be able to announce further expansion of our
footprint in the South of England at Bournemouth and London Luton airports
where operations will commence from 4 February 2025 and 1 April 2025
respectively. With a combined total of over 700,000 seats on sale for Summer
2025, we are looking forward to our first day of flying from both bases when
we can begin delighting customers with our multi-award-winning leisure flights
and ATOL protected package holidays, just as we do for millions of other
satisfied customers across the UK every single year.
New Destinations
In October 2024, in response to strong demand from UK holidaymakers looking to
explore a new city or enjoy a festive getaway this winter, we launched two
brand-new and exciting Jet2CityBreaks destinations, Bratislava and Malmo. We
have also commenced flying to Morocco, offering year-round sun-drenched
holidays, city breaks and flights to Marrakech and Agadir.
In addition, we have expanded our Italian offering for Summer 2025 with
flights on sale to Salerno and the Amalfi Coast - one of the most iconic
destinations in the world.
Inflight Retail Operations Centre (ROC)
Having successfully launched the ROC, our inflight aviation supply and
logistics hub during Winter 2023/24, operations were ramped up significantly
for Summer 2024, with the Centre efficiently supplying inflight bar carts for
over 220 flights per day at its peak. This operation, which is the first of
its kind in the UK aviation industry, sets new standards for Customer First
service, efficiency and security and has been integral to Jet2.com's average
on-board stock availability improving to over 98% and materially ahead of the
levels achieved in previous years. This performance helped generate a very
healthy 14% improvement in inflight retail spend per passenger as compared to
the prior year.
Given its success, the Group has commenced the second phase of this
initiative, combining leading-edge automation with customer data intelligence,
in order to create an improved, bespoke onboard retail experience which in
time will further optimise our inflight revenue potential.
Outlook
Winter 2024/25 on sale seat capacity is currently 14% higher than Winter
2023/24 at 5.11m seats. The closer to departure, later booking profile
experienced during Summer 2024 has continued, with November's booked to date
average load factor up by 1.1ppts and season to date average load factor down
by 1.3ppts. Average pricing to date is displaying a modest increase for our
package holiday product, with flight-only slightly ahead.
Although there is a significant proportion of the Winter season still to sell,
we are currently on track to deliver Group profit before FX revaluation and
taxation for the year ending 31 March 2025 ahead of market expectations (‡),
assuming no material extraneous events in the remainder of the financial year.
Looking ahead to Summer 2025, on sale capacity of 18.74m seats is
approximately 9% higher than Summer 2024 including our new UK bases at
Bournemouth and London Luton airports. Bookings and pricing at this very early
stage are in line with management expectations.
Recent improvements in the macro-economic environment including falling
inflation should help ease some cost base pressures. In addition, we are
approximately 70% hedged for Summer 2025 for both foreign exchange (USD and
Euro) and jet fuel and 100% hedged for calendar year 2025 carbon emissions
allowances, locking in a healthy proportion of cost certainty. As ever, we
continue to be mindful of the potential indirect impacts of ongoing
geo-political challenges and the financial impact of the recent UK budget, in
particular in the area of employment costs, which we estimate will increase
our labour costs by approximately £25m per year, plus any wider consumer
implications.
Steve Heapy, Jet2 plc Chief Executive Officer, commented:
"Even in difficult economic times, the annual overseas holiday remains a
highly valued and eagerly anticipated experience, often taking precedence over
other discretionary spend. As a result, we are confident that our proven
business model - anchored to delivering a fantastic customer service with a
well-established, trusted holiday brand - offers customers a compelling value
proposition. With our extensive product range, appealing flight times and
truly variable duration holidays, customers have plenty of choice and
flexibility to be able to tailor their holiday plans to meet their individual
budgets."
BUSINESS AND FINANCIAL PERFORMANCE
Customer Demand & Revenue
With a higher proportion of customer bookings being made closer to the date of
departure than the prior year, our Leisure Travel business adapted its
approach to reflect the changing demand pattern to ensure its offer in the
market remained attractive, delivering a strong first half financial
performance.
Total seat capacity increased by 13% to 14.85m (2023: 13.20m) with flown
passengers growing by 11% to 13.34m (2023: 11.97m) meaning an average load
factor of 89.8% (2023: 90.7%).
Given the late booking profile, demand for our more price sensitive, shorter
lead time flight-only product proved strong as passengers increased by 18% to
4.11m (2023: 3.49m). Higher absolute margin per passenger Package holiday
customers also increased by 8% to 4.67m (2023: 4.31m), representing 69.2% of
departing passengers during the period (2023: 70.8%).
Package holiday pricing was resilient with the average price of a Jet2holiday
up 6% to £904 (2023: £855) whilst Flight-only ticket yield per passenger
sector softened by 1% to £130.81 (2023: £131.71), although absolute gains
from the strong late demand more than offset this slight price decrease.
Given our seat capacity growth, the later passenger booking profile, the mix
of passengers and total margin achieved, we were very pleased with this
outcome.
Pleasingly, non-ticket revenue per passenger sector increased by 7% to £25.18
(2023: £23.59) supported by improved in-flight product mix and stock
availability from the ROC in its first full season of operation, which helped
to generate a very healthy 14% increase in inflight retail customer spend per
passenger.
As a result, overall Group Revenue increased by 15% to £5,085.4m (2023:
£4,407.4m), with revenue per flown passenger rising 4% to £381 (2023:
£368).
Operating Expenses
Hotel accommodation costs increased 21% to £2,137.2m (2023: £1,771.5m).
Other than customer volume growth, continuing inflationary pressures on wages,
food and energy costs added approximately 9%, with a further 2% due to an
increased proportion of higher star rated hotel holidays taken.
Fuel costs increased by 4% to £486.5m (2023: £468.3m), as the increase in
flying activity was offset by reductions in average hedged prices in a partial
easing of the significant rate increases experienced over the previous two
years, plus additional benefits from flying with new, more fuel efficient
A321neo aircraft.
Landing, navigation and third-party handling costs climbed 17% to £367.5m
(2023: £314.2m), with the growth above flying activity linked to average rate
increases across UK and European bases, including charges for new security
systems, plus third-party salary costs which have risen considerably.
Travel agents commission increased 9% to £133.9m (2023: £123.3m) in line
with the rise in the average package holiday price plus volume growth in this
distribution channel.
Maintenance costs rose by 25% to £92.4m (2023: £74.2m) as we operated seven
additional leased aircraft in Summer 2024, bringing total leased aircraft,
which have a higher maintenance rate per flying hour than owned aircraft, to
37. In addition, our engineering repair costs increased at a higher rate than
average inflation, a reflection of continued global supply chain challenges.
In-resort transfer costs increased by 19% to £84.7m (2023: £71.4m) due to
customer volume growth, plus increases in average rates per passenger,
primarily a function of driver costs.
Carbon costs increased by 2% to £78.5m (2023: £76.9m). Volumes rose by 30%
at a rate higher than the growth in flying activity as the EU Emissions
Trading Scheme (ETS) exemption for return flights from the Canaries and
Madeira to the UK was removed. However, this increase was largely offset as we
took advantage of weaker UK ETS markets when purchasing carbon allowances and
benefited from a rebasing of EU ETS free allowances. In addition, we amended
our sustainability strategy discontinuing the purchasing of voluntary carbon
offsets and instead investing these monies in the installation of winglets on
our aircraft which directly reduce carbon emissions.
In-flight cost of sales increased by 25% to £71.4m (2023: £57.2m) which
included increases in the cost of goods sold and higher cabin crew commission
directly associated with the growth in inflight retail spend. This was offset
by lower third-party distribution costs, with the equivalent in-house labour
and overhead costs of the new ROC distribution facility recorded within either
Staff costs or Other operating charges respectively.
Staff costs increased by 17% to £443.4m (2023: £379.3m) which included a
5.5% pay award in keeping with our People, Service, Profits principles to
retain motivated colleagues who embody our Customer First ethos. In addition,
investment in headcount grew not only to support the 13% increase in Summer
2024 seat capacity which included the first summer of operation at the ROC,
but also for the future as we recruited pilots earlier for our expanding
A321neo aircraft fleet.
Brand and direct marketing costs grew 9% to £136.5m (2023: £125.4m) with
bookings 10% higher as the business invested to maximise average load factor
and to optimise the forward bookings position for Winter 2024/25 and Summer
2025 respectively. Overall direct marketing cost of acquisition was down on
the prior year due to the increased flight-only mix of passengers. In
addition, investment was made in the digital transformation of our marketing
technology infrastructure which will support future cost per acquisition
efficiency.
As a result, total operating expenses increased 16% to £4,383.9m (2023:
£3,790.4m), with total operating cost per flown passenger increasing 4% to
£328 (2023: £316).
Operating Profit
Overall Group operating profit increased 14% to £701.5m (2023: £617.0m),
with operating profit per flown passenger 2% higher at £53 (2023: £52).
Net Financing Income
Net financing income (excluding Net FX revaluation gains / (losses)) increased
by £21.4m to £68.3m (2023: £46.9m), primarily due to £98.2m (2023:
£80.1m) of finance income generated from higher cash deposits together with
increased bank interest rates as compared to the prior year.
Finance expenses of £29.9m (2023: £33.2m) decreased following a reduction in
total debt of 4% to £1,334.8m (2023: £1,393.7m) which included the
prepayment of certain higher margin aircraft loan balances.
In addition, a net FX revaluation gain of £19.0m (2023: £4.1m loss) resulted
from the retranslation of foreign currency denominated monetary balances as
Sterling strengthened against the Euro and US Dollar.
Group profit before foreign exchange revaluation & taxation
As a result, Group profit before foreign exchange revaluation & taxation
increased 16% to £772.4m (2023: £664.6m) with profit before foreign exchange
revaluation & taxation per flown passenger rising 4% to £58 (2023: £56).
Statutory Net Profit for the period and Earnings Per Share
The Group tax charge of £198.5m (2023: £164.5m) is made at an effective tax
rate of 25% (2023: 25%).
Consequently, Group statutory profit after taxation improved 20% to £592.9m
(2023: £496.0m) and basic earnings per share increased 21% to 279.3p (2023:
231.0p).
Cash Flows
In the reporting period, the Group generated operating cash inflows before
working capital movements of £861.8m (2024: £746.1m) primarily driven by the
strong trading performance which resulted in EBITDA(*) improving to £857.0m
(2023: £739.8m).
Movements in working capital, in particular a decrease in advance customer
cash receipts driven by the runoff of larger customer cash balances at 31
March year on year, a reduction in hotel supplier advances and carbon
emissions allowances, plus an increase in trade and other payables, a function
of summer direct operating costs yet to be paid, resulted in cash outflows of
£36.8m (2024: £39.3m cash inflow).
The higher interest rate environment combined with higher average cash
balances resulted in an increase in net finance income received to £79.9m
(2024: £38.5m). After claiming capital allowances on new aircraft spend and
utilising a proportion of the deferred tax asset in respect of losses incurred
during the Covid pandemic, Corporation tax payments were £18.7m (2023:
£21.5m). Overall, the Group generated £886.2m of cash from its operating
activities (2023: £802.4m), an increase of 10%.
Capital expenditure of £229.4m (2023: £182.0m) represented payments for two
Airbus A321neo deliveries, the purchase of two previously leased midlife
Boeing 737-800NG aircraft, plus pre-delivery payments for future aircraft
deliveries including those related to the exercise of the remaining 36 Airbus
purchase rights. We also invested in the continued maintenance of our existing
aircraft fleet, ensuring its long-term reliability and performance and in our
Retail Operations Centre, with the ongoing installation of leading-edge
automation equipment. Finally, we commenced the construction of a second
aircraft maintenance facility at Manchester Airport which is expected to be
complete in late 2025, to further enhance our in-house fleet maintenance
capacity.
Consequently, free cash flow increased to £656.8m (2023: £618.4m).
Net cash used in financing activities of £239.5m (2023: £31.7m) included
debt repayments of £178.3m, with £87.9m in respect of aircraft finance
prepaid ahead of its maturity date, and a loan advanced of £47.8m for an
aircraft financed in the period. In addition, we repurchased 7.8m shares,
representing just over 3.6% of our issued share capital, for consideration of
£109.0m through our newly established Employee Benefit Trust (EBT), to
proactively avoid shareholder dilution from satisfying Company share award
schemes.
Overall liquidity increased by 12% with a total cash and money market deposits
balance at the half year end of £3,596.4m (2023: £3,214.6m). Our 'Own Cash'*
position (excluding customer deposits) of £2,318.3m increased by 9% (2023:
£2,121.2m).
Total debt decreased by 4% to £1,334.8m (2023: £1,393.7m) and net cash
increased by 24% to £2,261.6m (2023: £1,820.9m).
Post reporting period end, and in line with its capital allocation policy, the
Company completed a £50m repurchase in aggregate principal amount of the
Company's £387.4 million 1.625% guaranteed convertible bonds due in June
2026, which were surrendered for cancellation. Following this repurchase,
£337.4m in aggregate principal amount remain outstanding.
* Further information on the calculation of this measure can be found in Note
3.
Liquidity
A strong balance sheet and ample liquidity are important attributes in this
industry, given its nature and capital intensity. Consequently, the Group
maintains a robust financial position not only to prepare us for increasing
gross capital expenditure (which is expected to approach £5.7bn in aggregate
over the next 7 years) and debt repayment commitments, but also to provide
financial resilience and flexibility for those opportunities and challenges
that the current and future macro-economic environments may present.
Key Performance Indicators (unaudited) HY25 HY24 Change
Seat capacity 14.85m 13.20m 13%
Flown passengers 13.34m 11.97m 11%
Load factor 89.8% 90.7% (0.9ppts)
Flight-only passengers 4.11m 3.49m 18%
Package holiday customers 4.67m 4.31m 8%
Package holiday customers % of total flown passengers 69.2% 70.8% (1.6ppts)
Flight-only ticket yield per passenger sector (excl. taxes)† £130.81 £131.71 (1%)
Average package holiday price £904 £855 6%
Non-ticket revenue per passenger sector † £25.18 £23.59 7%
Advance sales made as at 30 September £2,514.3m £2,169.1m 16%
† The prior year Flight-only ticket yield per passenger sector and
Non-ticket revenue per passenger sector have been restated. Further
information on this can be found in Note 4.
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.
For further information, please contact:
Jet2 plc Tel: 0113 239 7692
Steve Heapy, Chief Executive Officer
Gary Brown, Group Chief Financial Officer
Institutional investors and analysts: Tel: 0113 848 0242
Mark Buxton, Finance and Investor Relations Director
Cavendish Capital Markets Limited - Nominated Adviser Tel: 020 7220 0500
Katy Birkin / Camilla Hume / George Lawson
Canaccord Genuity Limited - Joint Broker Tel: 020 7523 8000
Adam James / Harry Rees
Jefferies International Limited - Joint Broker Tel: 020 7029 8000
Ed Matthews / Jee Lee
Burson Buchanan - Financial PR Tel: 020 7466 5000
Richard Oldworth / Toto Berger
Notes to Editors
Jet2 plc is a Leisure Travel Group, comprising Jet2holidays, the UK's leading
provider of ATOL protected package holidays to leisure destinations across the
Mediterranean, Canary Islands and European Leisure Cities and Jet2.com, the
UK's third largest airline by number of passengers flown, which specialises in
scheduled holiday flights. In its most recent financial year ended 31 March
2024, over 68% of flown passengers took an end-to-end package holiday with the
remainder taking a flight-only. During the same period over 80% of Group
revenue related to package holidays with the majority of the balance
flight-only.
Jet2 currently operates from 11 UK airport bases at Belfast International,
Birmingham, Bristol, East Midlands, Edinburgh, Glasgow, Leeds Bradford,
Liverpool John Lennon, Manchester, Newcastle and London Stansted. A 12(th) UK
base at Bournemouth airport will commence operations on 4 February 2025 with a
13(th) at London Luton airport commencing on 1 April 2025.
Jet2 plc
Condensed Consolidated Income Statement (Unaudited)
for the half year ended 30 September 2024
Note Half year ended Half year ended Year
30 September 30 September ended
2024 2023 31 March
£m £m 2024
£m
Revenue 4 5,085.4 4,407.4 6,255.3
Operating expenses 5 (4,383.9) (3,790.4) (5,827.1)
Operating profit 701.5 617.0 428.2
Finance income 98.2 80.1 159.5
Finance expense (29.9) (33.2) (70.9)
Net FX revaluation gains / (losses) 19.0 (4.1) 9.4
Net financing income 87.3 42.8 98.0
Profit on disposal of property, plant and equipment 2.6 0.7 3.3
Profit before taxation 791.4 660.5 529.5
Taxation 6 (198.5) (164.5) (130.3)
Profit for the period 592.9 496.0 399.2
(all attributable to equity shareholders of the Parent)
Earnings per share
- basic 8 279.3p 231.0p 185.9p
- diluted 8 249.7p 207.5p 170.4p
Jet2 plc
Condensed Consolidated Statement of Comprehensive Income (Unaudited)
for the half year ended 30 September 2024
Half year ended Half year ended Year
30 September 30 September 2023 ended
2024 £m 31 March
£m 2024
£m
Profit for the period 592.9 496.0 399.2
Other comprehensive (expense) / income
Cash flow hedges:
Fair value (losses) / gains (199.8) 87.1 (53.9)
Net amount transferred to Consolidated Income Statement 42.3 22.0 65.3
Cost of hedging reserve movement 15.0 3.3 (5.3)
Related taxation credit / (charge) 35.6 (28.1) (1.5)
Revaluation of foreign operations (5.2) 0.6 (1.9)
(112.1) 84.9 2.7
Total comprehensive income for the period 480.8 580.9 401.9
(all attributable to equity shareholders of the Parent)
Jet2 plc
Condensed Consolidated Statement of Financial Position (Unaudited)
at 30 September 2024
30 September 2024 30 September 2023 31 March 2024
£m £m £m
Non-current assets
Intangible assets 26.8 26.8 26.8
Property, plant and equipment 1,326.0 1,039.4 1,193.2
Right-of-use assets 596.1 552.8 636.4
Trade and other receivables 25.0 11.9 21.2
Derivative financial instruments 7.3 28.1 17.3
Other equity investment 2.0 2.0 2.0
1,983.2 1,661.0 1,896.9
Current assets
Inventories 88.9 60.7 124.8
Trade and other receivables 253.3 254.2 332.8
Derivative financial instruments 1.9 62.8 30.8
Money market deposits 1,706.3 1,871.6 1,745.1
Cash and cash equivalents 1,890.1 1,343.0 1,439.6
3,940.5 3,592.3 3,673.1
Total assets 5,923.7 5,253.3 5,570.0
Current liabilities
Trade and other payables 1,015.7 823.3 477.4
Deferred revenue 1,294.1 1,110.8 1,903.9
Borrowings 32.7 79.2 44.6
Lease liabilities 119.1 104.3 131.0
Provisions 60.0 68.6 63.2
Derivative financial instruments 173.9 38.6 83.0
2,695.5 2,224.8 2,703.1
Non-current liabilities
Deferred revenue 12.6 10.1 22.7
Borrowings 667.9 681.7 711.2
Lease liabilities 515.1 528.5 568.6
Provisions 57.2 49.1 39.8
Derivative financial instruments 6.0 0.9 5.6
Deferred taxation 183.6 157.9 110.1
1,442.4 1,428.2 1,458.0
Total liabilities 4,137.9 3,653.0 4,161.1
Net assets 1,785.8 1,600.3 1,408.9
Shareholders' equity
Share capital 2.7 2.7 2.7
Share premium 19.8 19.8 19.8
Own shares reserve (95.5) - -
Cash flow hedging reserve (124.8) 66.6 (6.7)
Cost of hedging reserve (10.7) (15.5) (21.9)
Other reserves 48.1 55.8 53.3
Retained earnings 1,946.2 1,470.9 1,361.7
Total shareholders' equity 1,785.8 1,600.3 1,408.9
Jet2 plc
Condensed Consolidated Statement of Cash Flows (Unaudited)
for the half year ended 30 September 2024
Half year ended Half year ended Year ended
30 September 2024 30 September 2023 31 March
£m £m 2024
£m
Profit before taxation 791.4 660.5 529.5
Net financing income (including Net FX revaluation (gains) / losses) (87.3) (42.8) (98.0)
Depreciation 152.9 122.1 248.8
Profit on disposal of property, plant and equipment (2.6) (0.7) (3.3)
Equity settled share-based payments 7.4 7.0 14.7
Operating cash flows before movements in working capital 861.8 746.1 691.7
Decrease / (increase) in inventories 35.9 (20.5) (84.6)
Decrease / (increase) in trade and other receivables 73.2 49.0 (55.7)
Increase in trade and other payables 459.8 436.2 134.5
(Decrease) / increase in deferred revenue (619.9) (442.7) 363.0
Increase in provisions 14.2 17.3 5.6
Cash generated from operations 825.0 785.4 1,054.5
Interest received 100.7 62.3 139.7
Interest paid (20.8) (23.8) (55.5)
Income taxes paid (18.7) (21.5) (45.2)
Net cash generated from operating activities 886.2 802.4 1,093.5
Cash used in investing activities
Purchase of property, plant and equipment (225.0) (180.3) (403.9)
Purchase of right-of-use assets (4.4) (1.7) (4.1)
Purchase of equity investments - (2.0) (2.0)
Proceeds from sale of property, plant and equipment 2.7 0.7 3.3
Net decrease / (increase) in money market deposits 38.5 (201.0) (75.6)
Net cash used in investing activities (188.2) (384.3) (482.3)
Cash used in financing activities
Repayment of borrowings (103.5) (71.1) (173.0)
New loans advanced 47.8 94.7 190.7
Payment of lease liabilities (74.8) (55.3) (116.5)
Purchase of own shares (109.0) - -
Dividends paid in the year - - (25.8)
Net cash used in financing activities (239.5) (31.7) (124.6)
Net increase in cash in the period 458.5 386.4 486.6
Cash and cash equivalents at beginning of period 1,439.6 955.2 955.2
Effect of foreign exchange rate changes (8.0) 1.4 (2.2)
Cash and cash equivalents at end of period 1,890.1 1,343.0 1,439.6
Jet2 plc
Condensed Consolidated Statement of Changes in Equity (Unaudited)
for the half year ended 30 September 2024
Share Share premium Own shares reserve Cash flow hedging reserve Cost of hedging reserve Other reserves(1) Retained earnings Total shareholders' equity
capital
£m £m £m £m £m £m £m £m
Balance at 31 March 2023 2.7 19.8 - (15.3) (17.9) 55.2 967.9 1,012.4
Total comprehensive income - - - 81.9 2.4 0.6 496.0 580.9
Share-based payments - - - - - - 7.0 7.0
Balance at 30 September 2023 2.7 19.8 - 66.6 (15.5) 55.8 1,470.9 1,600.3
Total comprehensive expense - - - (73.3) (6.4) (2.5) (96.8) (179.0)
Share-based payments - - - - - - 7.7 7.7
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
Total comprehensive income - - - (118.1) 11.2 (5.2) 592.9 480.8
Share-based payments - - - - - - 7.4 7.4
Deferred tax on share-based payments - - - - - - (2.3) (2.3)
Purchase of own shares - - (109.0) - - - - (109.0)
Own shares issued under share schemes - - 13.5 - - - (13.5) -
( )
Balance at 30 September 2024 2.7 19.8 (95.5) (124.8) (10.7) 48.1 1,946.2 1,785.8
(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 £3.3m at 30 September 2024.
Jet2 plc
Notes to the consolidated interim report
for the half year ended 30 September 2024 (Unaudited)
1. 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 interim financial report consolidates the financial statements of
Jet2 plc and its subsidiaries.
This interim report has been prepared and approved by the Directors in
accordance with UK-adopted international accounting standards and applicable
law. It does not fully comply with IAS 34 - Interim Financial Reporting, which
is not currently required to be applied by AIM companies.
2. Accounting policies
Basis of preparation of the interim report
This unaudited consolidated interim financial report for the half year ended
30 September 2024 does not constitute statutory accounts as defined in s435 of
the Companies Act 2006. The financial statements for the year ended 31 March
2024 were prepared in accordance with UK-adopted international accounting
standards and applicable law and have been delivered to the Registrar of
Companies. The report of the auditor on those financial statements was (i)
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 interim financial report 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
applied within this interim report are consistent with those detailed in the
Annual Report & Accounts for the year ended 31 March 2024, aside from the
new policy set out below in respect of the Employee Benefit Trust established
in the period.
The Group's interim financial report is presented in pounds sterling and all
values are rounded to the nearest £100,000 except where indicated otherwise.
Employee Benefit Trust
The Jet2 plc Employee Benefit Trust (EBT) holds shares for the purpose of
satisfying future awards that may vest under the Company's share-based
incentive schemes. The assets and liabilities of the EBT are accounted for as
assets and liabilities of Jet2 plc on the basis that the EBT is acting as the
agent of Jet2 plc. The EBT's purchases of Jet2 plc ordinary shares are debited
directly to equity and disclosed separately in the Statement of Financial
Position in the Own shares reserve.
Going concern
The Directors have prepared financial forecasts for the Group, comprising
profit before and after taxation, balance sheets and projected cash flows
through to 31 March 2027.
To assess the appropriateness of the preparation of the Group's interim
financial report on a going concern basis, two financial forecast scenarios
have been prepared for the 12-month period following approval of this interim
financial report:
· A base case which assumes a full unhindered Summer 2025 flying programme
utilising a fleet of 131 aircraft at average load factors above 90%, against a
6% increase in seat capacity; and
· A downside scenario with load factors reduced to 80% for 12 months from
November 2024 to reflect a possible reduction in demand or the occurrence of
operationally disruptive events and 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, 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, the base case scenario
incorporates the funding of some future aircraft deliveries with our
well-established aircraft financing partners. 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 £3,596.4m at 30 September 2024 together
with the forecast monthly cash utilisation, under both scenarios the Group
would have sufficient liquidity throughout a period of at least 12 months from
the date of approval of this interim financial report. In addition, the Group
is forecast to meet its Revolving Credit Facility covenants at 31 March 2025
and 30 September 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 at least 12 months from the date of approval of the interim financial
report. For this reason, they continue to adopt the going concern basis in
preparing the unaudited interim report for the half year ended 30 September
2024.
3. 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 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:
Half year ended Half year ended Year ended
30 September 30 September 31 March
2024 2023 2024
£m £m £m
Profit before taxation 791.4 660.5 529.5
Net FX revaluation (gains) / losses (19.0) 4.1 (9.4)
Profit before FX revaluation and taxation 772.4 664.6 520.1
Net financing (income) / expense (excluding Net FX revaluation (gains) / (68.3) (46.9) (88.6)
losses)
Depreciation of property, plant and equipment 82.1 70.6 135.8
Depreciation of right-of-use assets 70.8 51.5 113.0
EBITDA 857.0 739.8 680.3
'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
to aid users in understanding the liquidity of the Group.
Half year ended Half year ended Year ended
30 September 30 September 31 March
2024 2023 2024
£m £m £m
Cash and cash equivalents 1,890.1 1,343.0 1,439.6
Money market deposits 1,706.3 1,871.6 1,745.1
Cash and money market deposits 3,596.4 3,214.6 3,184.7
Deferred revenue (1,306.7) (1,120.9) (1,926.6)
Trade and other receivables 28.6 27.5 73.3
'Own Cash' 2,318.3 2,121.2 1,331.4
Trade and other receivables relate to invoicing of amounts due from travel
agents in respect of package holiday deposits and balance payments.
4. 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 licenced 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:
Half year ended 30 September 2024 Half year ended 30 September 2023 Year ended
Restated(1) 31 March
2024
Restated(1)
£m £m £m
Package holidays 4,172.7 3,628.9 5,046.4
Flight-only ticket revenue(1) 533.2 456.0 674.3
Non-ticket revenue(1) 336.0 282.3 427.4
Other Leisure Travel 43.5 40.2 107.2
Total revenue 5,085.4 4,407.4 6,255.3
(1)The comparative disaggregations of revenue for the half year ended 30
September 2023 and year ended 31 March 2024 have been restated to disclose
certain ancillary revenues linked to the price of a customer flight ticket
within Flight-only ticket revenue. Previously these amounts were included
within Non-ticket revenue. For the half year ended 30 September 2023,
Non-ticket revenue reduced from £308.9m to £282.3m and Flight-only ticket
revenue increased from £429.4m to £456.0m. For the year ended 31 March 2024,
Non-ticket revenue reduced from £466.8m to £427.4m and Flight-only ticket
revenue increased from £634.9m to £674.3m. There are no changes to the total
revenue reported.
5. Operating expenses
Half year ended 30 September 2024 Half year ended 30 September 2023 Year ended
31 March
2024
£m £m £m
Direct operating costs:
Accommodation 2,137.2 1,771.5 2,465.0
Fuel 486.5 468.3 697.4
Landing, navigation and third-party handling 367.5 314.2 474.9
Agent commission 133.9 123.3 166.9
Maintenance 92.4 74.2 152.0
Transfers 84.7 71.4 100.6
Carbon 78.5 76.9 106.3
In-flight cost of sales 71.4 57.2 92.6
Aircraft rentals (less than 12 months) 34.8 54.2 47.4
Other direct operating costs 85.0 83.9 118.1
Staff costs including agency staff 443.4 379.3 744.1
Marketing costs 136.5 125.4 264.2
Depreciation of property, plant and equipment 82.1 70.6 135.8
Depreciation of right-of-use assets 70.8 51.5 113.0
Other operating charges 79.2 68.5 148.8
Total operating expenses 4,383.9 3,790.4 5,827.1
6. Taxation
The taxation charge for the period of £198.5m (2023: £164.5m) reflects an
estimated annual effective tax rate of approximately 25% (2023: 25%).
7. Dividends
The declared interim dividend of 4.4p per share (2023: 4.0p) will be paid out
of the Company's available distributable reserves on 7 February 2025, to
shareholders on the register at 3 January 2025, with the ex-dividend date
being 2 January 2025. In accordance with IAS 1, dividends are recorded only
when paid and are shown as a movement in equity rather than as a charge to the
Consolidated Income Statement.
8. 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 period. In accordance with IAS 33 -
Earnings per Share, Own shares held by the Employee Benefit Trust are excluded
from the weighted average number of shares.
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 period, 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
Number Number
Number of issued Ordinary Shares 214,681,281 214,681,281
Weighted average shares purchased by the Employee Benefit Trust (2,370,898) -
Weighted average shares issued in the year 1,867 -
Total weighted average number of shares 212,312,250 214,681,281
Half year ended 30 September 2024 Half year ended 30 September 2023
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 592.9 212.3 279.3 496.0 214.7 231.0
Effect of dilutive instruments
Share options and deferred awards - 6.0 (7.7) - 5.9 (6.2)
Convertible bond 6.9 21.9 (21.9) 6.7 21.7 (17.3)
Diluted EPS 599.8 240.2 249.7 502.7 242.3 207.5
9. 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 2024 1,439.6 1,745.1 (755.8) (699.6) 1,729.3
Repayment of borrowings - - 103.5 - 103.5
Payment of lease liabilities - - - 74.8 74.8
New loans advanced - - (47.8) - (47.8)
Total changes from financing cash flows - - 55.7 74.8 130.5
Other cash flows 420.0 - - - 420.0
Deposit placements (1,175.0) 1,175.0 - - -
Deposit receipts 1,213.5 (1,213.5) - - -
Exchange differences (8.0) (0.3) 7.2 31.5 30.4
Unwind of interest(1) - - (7.7) (2.5) (10.2)
Lease movements(2) - - - (38.4) (38.4)
At 30 September 2024 1,890.1 1,706.3 (700.6) (634.2) 2,261.6
(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.
10. Contingent liabilities
The Group has issued various guarantees in the ordinary course of business,
none of which are expected to lead to a financial gain or loss. None of these
guarantees are considered to have a material fair value under IFRS 17 -
Insurance Contracts and consequently no liability has been recorded.
11. Other matters
This report will be posted on the Group's website, www.jet2plc.co
(http://www.jet2plc.co) m and copies are available from the Group Company
Secretary at the registered office address: Low Fare Finder House, Leeds
Bradford Airport, Leeds, LS19 7TU.
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