REG - Jet2 PLC - Interim Results
23/11/2023 07:00
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RNS Number : 3701U Jet2 PLC 23 November 2023
Jet2 plc
Interim Results
Jet2 plc, the Leisure Travel group ("the Group" or "the Company") announces
its unaudited interim results for the half year ended 30 September 2023.
Group financial highlights Half year ended Half year ended Half year end
30 September 30 September change
2023 2022
Unaudited Unaudited
Revenue £4,407.4m £3,567.6m 24%
Operating profit £617.0m £516.6m 19%
Profit before FX revaluation and taxation* £664.6m £505.0m 32%
Profit before taxation £660.5m £450.7m 47%
Profit for the period after taxation £496.0m £356.0m 39%
Basic earnings per share 231.0p 165.9p 39%
Interim dividend per share 4.0p 3.0p 33%
* Further information on the calculation of this measure can be found in Note
3.
· Group operating profit increased by 19% to £617.0m (2022: £516.6m) and Group
profit before foreign exchange revaluation and taxation increased by 32% to
£664.6m (2022: £505.0m).
· Against Summer 2022, seat capacity increased 7% and the business achieved an
average load factor of 90.7% (2022: 90.7%) with higher margin per passenger
Package Holiday mix of total departing passengers up 4.9ppts to 70.8% (2022:
65.9%).
· Flight-only net ticket yield per passenger sector at £124.09 (2022: £105.00)
was 18% higher than the comparable period; the average price of a Jet2holidays
package holiday also increased 11% to £855.
· Our operations were directly impacted by the broader disruption caused by the
National Air Traffic Services ("NATS") failure, Rhodes wildfires and flooding
in Skiathos which resulted in approximately £14.0m of lost profitability.
· Total cash balance (including money market deposits) was £3,214.6m, an
increase of 14% (2022: £2,830.7m). Our Own Cash* (excluding customer
deposits) of £2,121.2m increased by 8% (2022: £1,968.6m).
· For the Winter 2023/24 season, against a 21% increase in on sale seat capacity
to 4.49m, the higher margin per passenger Package Holiday mix of departing
passengers is currently up by 2.6ppts. Although bookings have been a little
slower in recent weeks with average load factors currently 1.3ppts down on
Winter 2022/23 at the same point, average pricing to date remains robust.
· We are currently on track to deliver Group profit before FX revaluation and
taxation for the year ending 31 March 2024 of between £480m and £520m, in
line with our previous guidance.
· Looking ahead, current seat capacity for Summer 2024 at 17.19m seats is
approximately 12% higher than Summer 2023. Bookings and pricing at this early
stage are encouraging, with average load factors 2.0ppts ahead of Summer 2023
at the same point.
· We know that many of our Customers prioritise their hard-earned holidays over
other areas of discretionary spend and that they truly cherish their time away
from our Rainy Island and want to be properly looked after throughout their
holiday experience. As a result, we remain confident that as a Customer First,
much trusted holiday provider, they will continue to travel with us 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, 23rd November 2023. For dial-in details for the
conference call, please contact Buchanan Communications in advance to
register: Jet2@buchanan.uk.com (mailto:Jet2@buchanan.uk.com)
Results for the half year
In what has proven to be a strong first half of the financial year, Group
operating profit increased by 19% to £617.0m (2022: £516.6m) and Group
profit before foreign exchange revaluation and taxation increased by 32% to
£664.6m (2022: £505.0m).
Despite the challenging economic environment, the popularity, resilience and
flexibility of our holiday products were reinforced, as we capitalised on
sustained though later customer demand, in particular for our end-to-end
package holidays, with pricing remaining robust.
For the reporting period, seat capacity increased 7% against Summer 2022 with
Jet2.com flying 11.97m passenger sectors (2022: 11.20m) and achieving an
average load factor of 90.7% (2022: 90.7%). Pleasingly, higher margin per
passenger Package Holiday mix of total departing passengers was up 4.9ppts
against Summer 2022 to 70.8% (2022: 65.9%).
The Group commits considerable investment to be well prepared for its summer
operations and this year was no different, as we welcomed over 2,500 new
colleagues since 31 March 2023, bringing the total number to over 15,000 at
peak summer. All have been comprehensively trained in the company's 'Take Me
There' values (Be Present; Create Memories; Take Responsibility; and Work As
One Team), which are of paramount importance in upholding our award-winning
customer service standards.
Our Customer First ethos means we endeavour 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',
which enable us to effectively navigate unforeseen events such as those
experienced this summer in Rhodes (wildfires) and Skiathos (flooding), the
technological systems failure at NATS, and the record number of air traffic
control strikes across Europe. This proactive approach meant we were able to
act swiftly to commit the necessary resources to support our Customers during
these incidents with our Colleagues responding admirably. As always, the Board
is hugely appreciative of all our Colleagues' immense efforts and support,
which enabled Jet2.com and Jet2holidays to fulfil the dreams of so many
Customers, taking them on their well-deserved and eagerly anticipated
holidays.
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;
marketing to ensure we optimise our pre-Summer 2024 forward booking position;
retaining increasing numbers of colleagues through the winter months to ensure
appropriate operational resilience ahead of next summer; and attracting new
colleagues in readiness for further expansion of our exciting package holiday
and flight-only offerings, including at our new base at Liverpool John Lennon
Airport where operations commence in late March 2024.
Interim Dividend
Basic earnings per share increased to 231.0p (2022: 165.9p) and in view of the
current full year outlook and the Board's continued confidence in the Group's
prospects, it has decided to pay an interim dividend of 4.0p per share (2022:
3.0p). The dividend will be paid on 2 February 2024 to shareholders on the
register at 29 December 2023, with the ex-dividend date being 28 December
2023.
Post reporting date events
We continually challenge ourselves to enhance our customer focused product
proposition and as a result, we made the bold, but exciting strategic decision
to take control of our critical in-flight retail operations. This move was
driven by the goal of not only seamlessly providing the in-flight service our
Customers have come to expect and enjoy, but also over time delivering an
improved, bespoke onboard retail experience and optimising revenue potential.
Consequently, on 18 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, will act 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 the onboard shop, such as fragrances,
beauty products, gifts and duty-free.
Fully stocked in-flight service carts will be distributed to our UK airport
bases by Wincanton Logistics in a fleet of Jet2.com and Jet2holidays branded
trailers, with Gate Gourmet acting as our new 'Last Mile Provider', to load
the service carts airside. The ROC facility employs leading 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.
As a result of the opening, up to 300 new jobs will be created. We are
thrilled to welcome our new colleagues and look forward to them playing a
critical role as we continue to grow.
The Board
Following the announcement on 6 July 2023 of Philip Meeson's intention to step
down as Executive Chairman, the Board collectively and carefully considered
the qualities, skillset and experience required of a new Non-Executive
Chairman. Of particular importance was the need to ensure a seamless
leadership transition together with the requirements to support the Company's
continued growth ambitions, uphold its established values of People, Service,
Profits and contribute to its long-term success in continuing to deliver a
Customer First experience.
Consequently, it was agreed that the natural candidate for the role should be
the Company's existing Senior Independent Non-Executive Director, Robin
Terrell, with Philip standing down from the Board from 5 September 2023 and
moving to the position of Founder & Adviser, thus allowing the Company to
continue to draw on his wisdom and experience from leading the Group over the
last four decades as appropriate.
In further developments to the Board, we were also pleased to welcome Simon
Breakwell and Angela Luger as new independent Non-Executive Directors during
the period and look forward to them contributing to the future success of our
business.
Sustainability
The Group has continued to implement its Sustainability Strategy and during
the reporting period exercised a further 12 aircraft options from its order
with Airbus. The Group now has 110 firm ordered Airbus A321/320neo aircraft,
which could eventually extend up to 146 aircraft. These aircraft have reduced
fuel consumption and resultant carbon emissions per seat, plus a much lower
noise footprint against previous generation single aisle aircraft models and
will enable Jet2.com and Jet2holidays to grow more sustainably. To date, we
have taken delivery of the first five aircraft, with a further six due to
arrive next calendar year. Critically this long-term agreement with Airbus
ensures certainty of aircraft supply well into the next decade.
Furthermore, in December 2023 we will launch the Group's brand-new hotel
sustainability labelling scheme. This scheme will allow customers and
independent travel agents to easily find and choose from a collection of
certified sustainable hotels which meet Global Sustainable Tourism Council
recognised standards.
The Group intends to update its Sustainability Strategy during the first half
of 2024, as we continue to make progress to become more sustainable at every
stage of the customer journey: in the air, on the ground and in resort. More
detailed information on the Group's Sustainability Strategy can be found at
www.jet2plc.com/sustainability (http://www.jet2plc.com/sustainability) .
Outlook
For the Winter 2023/24 season, against a 21% increase in on sale seat capacity
to 4.49m, the higher margin per passenger Package Holiday mix of departing
passengers is currently up by 2.6ppts. Although bookings have been a little
slower in recent weeks with average load factors currently 1.3ppts down on
Winter 2022/23 at the same point, average pricing to date remains robust. With
over 40% of Winter bookings traditionally made during the January to March
period, we currently remain on track to deliver Group profit before FX
revaluation and taxation for the year ending 31 March 2024 of between £480m
and £520m, in line with our previous guidance. This remains dependent on no
material extraneous events in the balance of the financial year.
Looking ahead, current seat capacity for Summer 2024 at 17.19m seats is
approximately 12% higher than Summer 2023. Bookings and pricing at this early
stage are encouraging, with average load factors 2.0ppts ahead of Summer 2023
at the same point.
We know that many of our Customers prioritise their hard-earned holidays over
other areas of discretionary spend, although we are mindful of the
macro-economic environment and are also monitoring the current geo-political
challenges and how these may impact future spending behaviour. Therefore,
whilst we will carry on investing in our industry-leading customer service
proposition and operational resilience, we will continue to responsibly manage
our costs to ensure we can maintain our customer offering of great value
holidays and flights.
We believe that our Customers cherish their time away from our Rainy Island
and want to be properly looked after throughout their holiday experience. Our
well-established truly variable duration holidays and wide-ranging product
portfolio, which includes the All Inclusive Package - all-in cost certainty
and a wonderful product for challenging economic times - provide customers
with plenty of choice and flexibility to be able to tailor their holiday plans
to meet their individual budgets.
Steve Heapy, Jet2 plc Chief Executive Officer, commented:
"We are pleased to have delivered another strong financial performance during
the first half of the financial year, despite the well-publicised external
challenges faced. This clearly demonstrates that our end-to-end package
holiday is a popular and resilient product and is the Right Product for Price
Conscious Customers.
Our Customer First ethos runs deep throughout our company culture with
'People, Service, Profits' our guiding principles and our commitment to an
innovative, value for money product and exceptional customer service is
unwavering. We are truly grateful to have such exceptional Colleagues who are
not only some of the best in their profession but are also highly motivated
and incredibly proud to provide this level of service.
As a result, we remain confident that as a customer focused and much trusted
holiday provider, our Customers will continue to travel with us to the sun
spots of the Mediterranean, the Canary Islands and to European Leisure Cities
and that we can continue to deliver on our long-term strategy to be the UK's
Leading and Best Leisure Travel business."
Business and Financial Performance
Customer Demand & Revenue
Our Leisure Travel business benefitted from consistent demand for Real package
holidays from Jet2holidays® and scheduled holiday flights from Jet2.com, with
the later summer months displaying a strong shift towards a later booking
profile.
Passenger sectors flown increased by 7% to 11.97m (2022: 11.20m), with
customers choosing our end-to-end higher margin per passenger Package Holiday
product rising 15% to 4.31m (2022: 3.76m). Consequently, Package Holiday
customers represented 70.8% of overall flown passengers (2022: 65.9%) and as a
result, single sector passengers choosing our Flight-Only product reduced by
9% to 3.49m (2022: 3.82m).
Average load factor remained stable at 90.7% (2022: 90.7%) on a 7% increase in
seat capacity to 13.20m (2022: 12.35m), underlining the popularity and
resilience of our Leisure Travel products.
Pricing was robust with Flight-only ticket yield per passenger sector 18%
higher than the prior period at £124.09 (2022: £105.00) and the average
price of a Jet2holidays package holiday up 11% to £855 (2022: £771).
Non-ticket revenue per passenger sector of £25.81 (2022: £25.79) was
consistent year-on-year. This performance included improved in-flight product
mix and stock availability as compared to the supply issues experienced during
the previous summer, offset by lower flight-only hold baggage revenue due to
the growing package holiday mix (where the hold bags are included in the
holiday price).
As a result, overall Group Revenue increased 24% to £4,407.4m (2022:
£3,567.6m).
Net Operating Expenses
Increased passenger volumes and the resultant higher levels of flying
activity, plus the shift to a higher proportion of package holiday customers,
resulted in a 24% increase in direct operating expenses (including direct
staff costs) to £3,285.2m (2022: £2,654.9m), with fuel, carbon and
accommodation costs showing disproportionate growth above the volume increase,
due to cost inflation.
Underlying wage costs increased 9% reflecting the challenging inflationary
environment and recognising that happy and well-paid Colleagues are
fundamental to the future success of our business.
Finally, the Group continued to make considerable investment in brand and
direct marketing to sustain average load factors for Summer 2023 and to
support customer bookings for Winter 2023/24 and Summer 2024.
As a result, total net operating expenses increased 24% to £3,790.4m (2022:
£3,051.0m).
Operating Profit
Overall Group operating profit increased 19% to £617.0m (2022: £516.6m),
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 in the media.
Net Financing Income
Net financing income (excluding Net FX revaluation losses) increased by
£59.0m to £46.9m (2022: £12.1m expense), primarily due to £80.1m (2022:
£20.5m) of finance income following multiple bank interest rate increases,
combined with higher average cash balances.
Group profit before foreign exchange revaluation & taxation
As a result, Group profit before foreign exchange revaluation and taxation
increased 32% to £664.6m (2022: £505.0m). Total profit for the period after
taxation increased 39% to £496.0m (2022: £356.0m).
Cash Flow & Liquidity
In the first half of the financial year, the Group generated cash from
operating activities of £802.4m (2022: £787.0m), the increase primarily a
result of improved EBITDA, together with higher finance income, offset by a
larger run off of customer advances driven by volume growth.
Capital expenditure of £182.0m (2022: £65.3m) represented balance payments
for Airbus A321neo deliveries in the period, together with pre-delivery
payments for future aircraft deliveries. In addition, we continued to invest
in the ongoing maintenance of our existing aircraft fleet, ensuring its
long-term reliability and performance. In early May 2023, Jet2.com took the
opportunity to secure additional premises at Manchester Airport to build a
second aircraft maintenance facility (next to its existing facility) which
will support our anticipated fleet growth over the forthcoming decade.
Furthermore, we invested in our new ROC to take control of Jet2.com's inflight
logistics operation, which was officially opened on 18 October 2023.
Purchase of equity investments of £2.0m represented the 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 2027.
Net cash used in financing activities of £31.7m (2022: £138.7m), comprised
£126.4m of debt repayments, which included £47.0m to repay short term
mid-life aircraft funding advanced during the pandemic, offset by loans
advanced of £94.7m for new aircraft deliveries in the period.
Overall liquidity improved significantly with a total cash balance (including
money market deposits) at the half year end of £3,214.6m, an increase of 14%
(2022: £2,830.7m). Our 'Own Cash' position (excluding customer deposits) of
£2,121.2m increased by 8% (2022: £1,968.6m).
Total debt decreased by 12% to £1,393.7m (2022: £1,584.9m) and net cash
increased by 46% to £1,820.9m (2022: £1,245.8m).
Extension of Revolving Credit Facility ("RCF")
Since the half year end, the Group has successfully extended its
sustainability-linked RCF by a further year through to 19 October 2027, on the
same commercial terms with our four supportive relationship banks: Barclays
Bank plc; HSBC UK Bank plc; Lloyds Bank plc; and National Westminster Bank
plc.
The Group maintains a robust financial position, characterised by a strong
balance sheet and ample liquidity. These invaluable resources form the bedrock
of our growth ambitions for the coming years, but also provide us with the
necessary financial resilience to adapt to and navigate potential challenges
should they arise.
Key Performance Indicators Half year ended Half year ended Half year end change
30 September 2023 30 September 2022
Leisure Travel sector seats available (capacity) 13.20m 12.35m 7%
Leisure Travel passenger sectors flown 11.97m 11.20m 7%
Leisure Travel average load factor 90.7% 90.7% -
Flight-only passenger sectors flown 3.49m 3.82m (9%)
Package holiday customers 4.31m 3.76m 15%
Package holiday customers % of total passenger sectors flown 70.8% 65.9% 4.9ppts
Flight-only ticket yield per passenger sector (excl. taxes) £124.09 £105.00 18%
Average package holiday price (excl. taxes) £855 £771 11%
Non-ticket revenue per passenger sector £25.81 £25.79 -
Advance sales made as at 30 September £2,169.1m £1,665.5m 30%
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.
Based on Company compiled consensus of 12 analysts, the Board believes current
average market expectations for Group profit before FX revaluation and
taxation for the year ending 31 March 2024 to be £507m.
For further information, please contact:
Jet2 plc Tel: 0113 239 7692
Steve Heapy, Chief Executive Officer
Gary Brown, Group Chief Financial Officer
Cavendish Capital Markets Limited Tel: 020 7220 0500
Nominated Adviser
Katy Birkin
Camilla Hume
George Lawson
Canaccord Genuity Limited Tel: 020 7523 8000
Joint Broker
Adam James
Jefferies International Limited Tel: 020 7029 8000
Joint Broker
Ed Matthews
Becky Lane
Buchanan Tel: 020 7466 5000
Financial PR
Richard Oldworth
Toto Berger
Notes to Editors
· Jet2holidays is the UK's largest package holidays provider and Jet2.com is the
UK's third largest airline by number of passengers flown.
· Jet2 currently operates from 10 bases across the UK - Belfast, Birmingham,
Bristol, East Midlands, Edinburgh, Glasgow, Leeds Bradford, London Stansted,
Manchester and Newcastle. Operations at Liverpool John Lennon Airport will
commence in March 2024.
Jet2 plc
Condensed Consolidated Income Statement (Unaudited)
for the half year ended 30 September 2023
Note Half year ended Half year ended Year
30 September 30 September ended
2023 2022 31 March
£m £m 2023
£m
Revenue 4,407.4 3,567.6 5,033.5
Net operating expenses 5 (3,790.4) (3,051.0) (4,639.5)
Operating profit 617.0 516.6 394.0
Finance income 80.1 20.5 58.7
Finance expense (33.2) (32.6) (64.5)
Net FX revaluation losses (4.1) (54.3) (19.8)
Net financing income / (expense) 42.8 (66.4) (25.6)
Profit on disposal of property, plant and equipment 0.7 0.5 2.6
Profit before taxation 660.5 450.7 371.0
Taxation 7 (164.5) (94.7) (80.2)
Profit for the period 496.0 356.0 290.8
(all attributable to equity shareholders of the Parent)
Earnings per share
- basic 6 231.0p 165.9p 135.4p
- diluted 6 207.5p 150.8p 126.6p
Jet2 plc
Condensed Consolidated Statement of Comprehensive Income (Unaudited)
for the half year ended 30 September 2023
Half year ended Half year ended Year
30 September 30 September 2022 ended
2023 £m 31 March
£m 2023
£m
Profit for the period 496.0 356.0 290.8
Other comprehensive income / (expense)
Cash flow hedges:
Fair value gains / (losses) 87.1 178.1 (49.4)
Net amount transferred to Consolidated Income Statement 22.0 (139.2) (164.1)
Cost of hedging reserve - changes in fair value 3.3 2.9 (17.0)
Related taxation (charge) / credit (28.1) (13.8) 47.6
Revaluation of foreign operations 0.6 7.8 3.9
84.9 35.8 (179.0)
Total comprehensive income for the period 580.9 391.8 111.8
(all attributable to equity shareholders of the Parent)
Jet2 plc
Condensed Consolidated Statement of Financial Position (Unaudited)
at 30 September 2023
30 September 2023 30 September 2022 31 March 2023
£m £m £m
Non-current assets
Intangible assets 26.8 26.8 26.8
Property, plant and equipment 1,039.4 867.2 927.7
Right-of-use assets 552.8 535.0 565.3
Investments 2.0 - -
Derivative financial instruments 28.1 32.9 14.3
1,649.1 1,461.9 1,534.1
Current assets
Inventories 60.7 20.9 40.2
Trade and other receivables 266.1 180.8 281.3
Derivative financial instruments 62.8 201.6 45.8
Money market deposits 1,871.6 1,624.8 1,669.5
Cash and cash equivalents 1,343.0 1,205.9 955.2
3,604.2 3,234.0 2,992.0
Total assets 5,253.3 4,695.9 4,526.1
Current liabilities
Trade and other payables 823.3 660.7 339.1
Deferred revenue 1,110.8 877.7 1,547.2
Borrowings 79.2 263.2 125.9
Lease liabilities 104.3 95.9 101.8
Provisions 68.6 94.3 57.4
Derivative financial instruments 38.6 24.8 85.1
2,224.8 2,016.6 2,256.5
Non-current liabilities
Deferred revenue 10.1 7.7 16.4
Borrowings 681.7 669.0 603.3
Lease liabilities 528.5 556.8 544.0
Provisions 49.1 35.3 40.0
Derivative financial instruments 0.9 3.8 16.8
Deferred taxation 157.9 114.4 36.7
1,428.2 1,387.0 1,257.2
Total liabilities 3,653.0 3,403.6 3,513.7
Net assets 1,600.3 1,292.3 1,012.4
Shareholders' equity
Share capital 2.7 2.7 2.7
Share premium 19.8 19.8 19.8
Cash flow hedging reserve 66.6 181.1 (15.3)
Cost of hedging reserve (15.5) (3.4) (17.9)
Other reserves 55.8 59.1 55.2
Retained earnings 1,470.9 1,033.0 967.9
Total shareholders' equity 1,600.3 1,292.3 1,012.4
Jet2 plc
Condensed Consolidated Statement of Cash Flows (Unaudited)
for the half year ended 30 September 2023
Half year ended Half year ended Year ended
30 September 2023 30 September 2022 31 March
£m £m 2023
£m
Profit before taxation 660.5 450.7 371.0
Net financing (income) / expense (including Net FX revaluation losses) (42.8) 66.4 25.6
Depreciation 122.1 98.1 185.2
Profit on disposal of property, plant and equipment (0.7) (0.5) (2.6)
Equity settled share-based payments 7.0 3.9 10.4
Operating cash flows before movements in working capital 746.1 618.6 589.6
Increase in inventories (20.5) (12.4) (31.7)
Decrease / (increase) in trade and other receivables 49.0 5.0 (117.5)
Increase in trade and other payables 436.2 438.7 118.7
(Decrease) / increase in deferred revenue (442.7) (303.7) 374.5
Increase in provisions 17.3 52.8 18.6
Cash generated from operations 785.4 799.0 952.2
Interest received 62.3 20.5 58.7
Interest paid (23.8) (24.3) (43.6)
Income taxes paid (21.5) (8.2) (15.2)
Net cash generated from operating activities 802.4 787.0 952.1
Cash flows used in investing activities
Purchase of property, plant and equipment (180.3) (65.0) (193.9)
Purchase of right-of-use assets (1.7) (0.3) (2.7)
Purchase of equity investments (2.0) - -
Proceeds from sale of property, plant and equipment 0.7 0.6 2.7
Net increase in money market deposits (201.0) (443.8) (481.9)
Net cash used in investing activities (384.3) (508.5) (675.8)
Cash flows used in financing activities
Repayment of borrowings (71.1) (100.4) (287.7)
Payment of lease liabilities (55.3) (38.3) (76.2)
New loans advanced 94.7 - -
Dividends paid in the year - - (6.4)
Net cash used in financing activities (31.7) (138.7) (370.3)
Net increase / (decrease) in cash in the period 386.4 139.8 (94.0)
Cash and cash equivalents at beginning of period 955.2 1,047.5 1,047.5
Effect of foreign exchange rate changes 1.4 18.6 1.7
Cash and cash equivalents at end of period 1,343.0 1,205.9 955.2
Jet2 plc
Condensed Consolidated Statement of Changes in Equity (Unaudited)
for the half year ended 30 September 2023
Share Share premium Cash flow hedging reserve Cost of hedging reserve Other reserves(1) Retained earnings Total shareholders' equity
capital
£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 - - 25.9 2.1 7.8 356.0 391.8
Share-based payments - - - - - 3.9 3.9
Balance at 30 September 2022 2.7 19.8 181.1 (3.4) 59.1 1,033.0 1,292.3
Total comprehensive expense - - (196.4) (14.5) (3.9) (65.2) (280.0)
Share-based payments - - - - - 6.5 6.5
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 - - 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
(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 £4.4m at 30 September 2023.
Jet2 plc
Notes to the consolidated interim report
for the half year ended 30 September 2023 (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 the AIM market of the
London Stock Exchange. 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 2023 does not constitute statutory accounts as defined in s435 of
the Companies Act 2006. The financial statements for the year ended 31 March
2023 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
unqualified, did not contain an emphasis of matter paragraph and did not
contain any statement under s495(3) nor (4) of the Companies Act 2006.
The interim financial report has been prepared under the historical cost
convention except for all derivative financial instruments, 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 2023.
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.
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 2026.
For the purpose of assessing 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 these financial statements:
· A base case which assumes a full unhindered Summer 2024 flying programme
utilising a fleet of 127 aircraft at average load factors above 90%, against a
12% increase in seat capacity; and
· A downside scenario with load factors reduced to 80% for 12 months from
November 2023 to reflect a possible reduction in demand, but with no
restrictions on flying to any of the Group's destinations.
The forecasts consider the current cash position and an assessment of the
principal areas of risk and uncertainty, paying particular attention to the
impact of the current UK macro-economic environment and how this may affect
consumers' future spending.
In addition to forecasting the cost base of the Group, both scenarios
incorporated the funding of some future aircraft deliveries with our
well-established aircraft financing partners and no mitigating actions taken
to defer uncommitted capital expenditure during the forecast period.
The Directors concluded that, given the combination of a closing cash balance
(including money market deposits) of £3,214.6m at 30 September 2023, together
with the forecast monthly cash utilisation, under both scenarios the Group
would have sufficient liquidity throughout a period of 12 months from the date
of approval of this interim financial report. In addition, the Group is
forecast to meet its RCF covenants at 31 March 2024 and 30 September 2024
under both scenarios with significant headroom.
As a result, the Directors have a reasonable expectation that the Group as a
whole has adequate resources to continue in operational existence for a period
of 12 months from the date of approval of the 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 2023.
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 in order to aid users in understanding the underlying
operating performance of the Group excluding the impact of foreign exchange
volatility.
Half year ended Half year ended Year ended
30 September 30 September 31 March
2023 2022 2023
£m £m £m
Profit before taxation 660.5 450.7 371.0
Net FX revaluation losses 4.1 54.3 19.8
Profit before FX revaluation and taxation 664.6 505.0 390.8
'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.
Half year ended Half year ended Year ended
30 September 30 September 31 March
2023 2022 2023
£m £m £m
Cash and cash equivalents 1,343.0 1,205.9 955.2
Money market deposits 1,871.6 1,624.8 1,669.5
Cash and money market deposits 3,214.6 2,830.7 2,624.7
Deferred revenue (1,120.9) (885.4) (1,563.6)
Trade and other receivables 27.5 23.3 66.0
'Own Cash' 2,121.2 1,968.6 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.
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 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.
Revenues for the Group can be further disaggregated by their nature for the
purposes of IFRS 15 as follows:
Half year ended 30 September 2023 Half year ended 30 September 2022 Year ended
31 March
2023
£m £m £m
Restated
Package holidays* 3,628.9 2,857.8 3,969.7
Flight-only ticket revenue† 429.4 390.6 556.7
Non-ticket revenue 308.9 288.8 421.5
Other Leisure Travel‡ 40.2 30.4 85.6
Total revenue 4,407.4 3,567.6 5,033.5
* Package holidays revenue is stated net of government taxes and incorporates
a timing adjustment in respect of holidays still in progress at the period end
as per IFRS 15 - Revenue from Contracts with Customers.
† Flight-only ticket revenue is stated net of a proportion of flight delay
compensation payments up to the full value of the ticket price. Any remaining
compensation which exceeds the full value of the ticket price is charged to
net operating expenses.
‡ Other Leisure Travel revenue of £40.2m (2022: £30.4m) consists of
cancellation income and charter revenues.
5. Net operating expenses
Half year ended 30 September 2023 Half year ended 30 September 2022 Year ended
31 March
2023
£m £m £m
Direct operating costs:
Accommodation 1,771.5 1,415.6 1,973.6
Fuel 468.3 324.5 521.4
Landing, navigation and third-party handling 314.2 271.4 403.4
Agent commission 123.3 103.9 142.0
Carbon 76.9 57.3 76.7
Maintenance 74.2 52.1 105.2
In-flight cost of sales 57.2 45.0 76.7
Aircraft rentals (less than twelve months) 54.2 53.9 61.1
Other direct operating costs 155.3 181.0 190.1
Staff costs including agency staff 379.3 288.1 590.4
Depreciation of property, plant and equipment 70.7 65.9 118.9
Depreciation of right-of-use assets 51.5 32.2 66.3
Other operating charges 193.8 160.1 313.7
Total net operating expenses 3,790.4 3,051.0 4,639.5
6. 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.
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.
Half year ended 30 September 2023 Half year ended 30 September 2022
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 496.0 214.7 231.0 356.0 214.6 165.9
Effect of dilutive instruments
Share options and deferred awards - 5.9 (6.2) - 4.6 (3.5)
Convertible bonds 6.7 21.7 (17.3) 7.0 21.5 (11.6)
Diluted EPS 502.7 242.3 207.5 363.0 240.7 150.8
7. Taxation
The taxation charge for the period of £164.5m (2022: £94.7m) reflects an
estimated effective tax rate of approximately 25% (2022: 21%).
8. Dividends
The declared interim dividend of 4.0p per share (2022: 3.0p) will be paid out
of the Company's available distributable reserves on 2 February 2024, to
shareholders on the register at 29 December 2023, with the ex-dividend date
being 28 December 2023. 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.
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 2023 955.2 1,669.5 (729.2) (645.8) 1,249.7
Repayment of borrowings - - 71.1 - 71.1
Payment of lease liabilities - - - 55.3 55.3
New loans advanced - - (94.7) - (94.7)
Total changes from financing cash flows - - (23.6) 55.3 31.7
Other cash flows 587.4 - - - 587.4
Deposit placements (998.7) 998.7 - - -
Deposit receipts 797.7 (797.7) - - -
Exchange differences 1.4 1.1 (2.2) (6.6) (6.3)
Unwind of interest(1) - - (5.9) (2.7) (8.6)
Lease movements(2) - - - (33.0) (33.0)
At 30 September 2023 1,343.0 1,871.6 (760.9) (632.8) 1,820.9
(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.
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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