Shares of Leeds-based Dart Group, owner of Jet2.com and Jet2holidays, recovered some lost ground on Wednesday after the firm said in a trading update that it expects profit for the financial year ending March 31, 2020, to be significantly ahead of current market expectations.
Dart Group said it is on course to do more business this summer despite a drop off in bookings because of the coronavirus outbreak.
“Due to the continued success of our growing Leisure Travel business, the board expects group profit before foreign exchange revaluation & taxation (excluding any impact of hedge ineffectiveness) for the financial year ending 31 March 2020 to be significantly ahead of current market expectations,” said Dart Group.
“However, future reductions of FY21 flying capacity will result in a proportion of the company’s existing hedging contracts becoming ineffective, thereby impacting those profits.”
Dart Group added: “Until very recently, customer demand for our very popular Package Holidays and Flight-Only Leisure Travel products has remained consistently strong, with the important January and February booking performance resulting in our Summer 2020 bookings tracking well ahead of our 16% summer seat capacity increase.
“Understandably, however, momentum has weakened over recent weeks with the increased reporting of Covid-19 cases in Europe.
“Nevertheless, our current cumulative Summer 2020 bookings remain above those at this time last year.
“The continuing success of our Package Holidays, including our newly launched ‘Vibe’ brand, together with our strong and prudent balance sheet gives us long term confidence for the future.
“However, given the limited visibility on the impact of Covid-19, the board is currently unable to determine how this will effect group profit before foreign exchange revaluation and taxation for the financial year ending 31 March 2021.
“We continue to monitor the situation carefully and are taking proportionate actions to underpin the stability of the business, which includes reducing capacity on some routes where warranted, but always keeping at front of mind the need to ensure our customers experience the holidays they deserve.
“We are also pleased to report that our distribution and logistics business, Fowler Welch, is trading in line with expectations and continues to develop its revenue pipeline with existing and new business opportunities.”