DART GROUP – Interims to 30 September 2003

RNS Number:2809S
Dart Group PLC
20 November 2003

20 November 2003

DART GROUP PLC
Interim Results for the Six Months Ended 30 September 2003

Dart Group PLC, the aviation services and distribution group, announces its
interim results for the six months ended 30 September 2003.

CHAIRMAN'S STATEMENT

I am pleased to report on the Group's trading for the six months ended 30
September 2003. Profit before tax and amortisation of goodwill has risen to
#7.4m (2002 – #5.7m) on turnover of #119.7m (2002 – #103.6m). Turnover
increased in the Aviation Services Division primarily as a result of our
scheduled low cost airline, Jet2.com, flying for a full six months. Turnover
fell slightly in the Distribution Division as a result of the closure of produce
distribution operations at Paddock Wood, Kent and the withdrawal from fruit
packing in Teynham, Kent.

The seasonal pattern of profitability has changed with first half profits being
higher than the second half as a result of Jet2.com being profitable during the
summer and loss-making during the winter.

First half capital expenditure amounted to #19.0m, the largest component being
the previously announced purchase of seven Boeing 737-300 aircraft, which are
now subject to engineering and conversion works prior to entering service.
Interest cover was 29 times (2002 – 10 times). Net borrowings marginally
increased to #28.5m (31 March 2003 – #28.2m). Gearing at the half year was
69% (31 March 2003 – 76%).

The majority of the Group's debt is denominated in US dollars, which provides a
natural hedge to the Boeing 737 assets held in the balance sheet in US dollars.
The Group has significant US dollar expenditure offset in part by material US
dollar income. In general, a weak dollar benefits the Group, however future
profit growth will be held back as a number of attractively priced forward
currency contracts will have all matured this financial year.

The Board has declared an unchanged interim dividend of 1.85p per share. The
dividend will be paid on 8 January 2004 to shareholders on the register as at
28 November 2003.

Aviation Services

The Aviation Services Division comprises Channel Express (Air Services) and
Benair Freight International, the Group's freight forwarder. Channel Express
operates contract charter services on behalf of express parcel companies,
freight forwarders and Royal Mail, together with passenger charters. Scheduled
low-cost services, under the brand name Jet2.com, were commenced in February of
this year.

The company's fleet consists of Airbus A300-B4 Eurofreighters, Boeing 737-300
passenger and Quick Change aircraft and Fokker F27 freighters. The A300-B4
Eurofreighter fleet is wholly contracted to the operation of overnight express
parcel services. The company's F27s are contracted to fly on behalf of Royal
Mail and newspaper publishers and also operate scheduled cargo services to the
Channel Islands.

As previously announced, a further seven Boeing 737-300s were purchased in this
first half from the receivers of Ansett Airlines of Australia, taking this
fleet to 14 aircraft. Seven are now operating in the freight and passenger
markets with the remainder either awaiting conversion to Quick Change
configuration, allowing them to fly both passenger and cargo services, or
awaiting engineering checks prior to entry into service. We expect our Quick
Change aircraft to fly night-time freight services for overnight express
carriers or Royal Mail and passenger charters during the day.

Jet2.com will allow the Group to reduce its dependence on the increasingly tight
margin business-to-business sector. Based at Leeds Bradford International
Airport, this business has met expectations in its first six months of services.
However, Jet2.com has an extensive pilot conversion programme in order to
expand operations in 2004 and will lose money in the weaker trading winter
months. Whilst the overall outlook appears promising, we do not discount the
intensely competitive environment we are trading in.

Benair Freight International has had a successful first half with turnover and
profits ahead of last year. Both its core freight operations and its
specialist ornamental fish importing business experienced continuing growth.

Distribution

Fowler Welch – Coolchain distributes fresh produce, flowers and
temperature-controlled products on behalf of supermarkets and to wholesale
markets throughout the United Kingdom. Trading conditions remain difficult
with supermarket customers demanding the highest level of service for the lowest
possible price. Over the past year a fundamental reorganisation and
rationalisation of this business has been undertaken with the aim of becoming
one of the most efficient operators in the sector. Further work to integrate
all the Division's distribution activities remains, however, and, whilst we
continue to win new business, we do not expect to see a resumption in profit
growth until the reorganisation is substantially complete and the Division's
management can turn its attention to expansion. Reorganisation of the
Division's European operations is also underway to integrate them into the
single distribution system, thereby reducing overheads and increasing
efficiencies through the sharing of resources, in order to meet competitive
pressures.

Our Channel Islands-based business is retaining its share of the Channel
Islands' freight market but continues to suffer from the decline in the Islands'
horticultural exports. However, new business is being gained and the company
makes a valuable contribution to divisional profitability.

Outlook

The results for the year remain difficult to predict. Much will depend on the
performance of Jet2.com over the winter. However, I remain cautiously
optimistic that we will achieve an acceptable result for the full year.

Philip Meeson,
Chairman 20 November 2003

www.dartgroup.co.uk

Enquiries: Philip Meeson, Chairman
Tel: 01202 597676 Mobile: 07785 258666

Mike Forder, Group Finance Director
Tel: 01202 597676 Mobile: 07721 865850

UNAUDITED INTERIM CONSOLIDATED RESULTS
for the half year to 30 September 2003

Half year to Half year to Year to
30 September 30 September 31 March
2003 2002 2003
(unaudited) (unaudited) (audited)
Note #'000 #'000 #'000

Turnover – continuing operations 1 119,661 103,585 198,176
Net operating expenses,
excluding amortisation of goodwill (112,496) (97,329) (189,354)
Amortisation of goodwill (248) (248) (497)

Net operating expenses (112,744) (97,577) (189,851)

Operating profit – continuing operations 6,917 6,008 8,325

Profit on disposal of fixed assets 446 10 82
Net interest payable 2 (237) (593) (989)

Profit on ordinary activities before taxation 7,126 5,425 7,418
Taxation (2,368) (1,804) (2,499)

Profit on ordinary activities after taxation 4,758 3,621 4,919
Dividends (636) (636) (2,094)

Retained profit for the period 4,122 2,985 2,825

Earnings per share
– basic 13.86p 10.55p 14.33p
– basic, excluding the amortisation of goodwill 14.58p 11.27p 15.78p
– diluted 13.83p 10.49p 14.27p

Dividend per share 1.85p 1.85p 6.11p

STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Half year to Half year to Year to
30 September 30 September 31 March
2003 2002 2003
(unaudited) (unaudited) (audited)
#'000 #'000 #'000

Profit on ordinary activities after taxation 4,758 3,621 4,919
Foreign exchange gain on foreign
equity investments (13) (6) 8

Total gains and losses recognised in the period 4,745 3,615 4,927

CONSOLIDATED BALANCE SHEET
at 30 September 2003

30 September 31 March
2003 2003
(unaudited) (audited)
Note #'000 #'000
Fixed assets

Intangible assets 8,029 8,277
Tangible assets 79,452 73,484
87,481 81,761

Current assets
Stock 2,299 2,452
Debtors 33,308 31,043
Cash at bank and in hand 12,330 6,940

47,937 40,435
Current liabilities
Creditors: amounts falling due
within one year (49,374) (48,496)

Net current liabilities (1,437) (8,061)

Total assets less current liabilities 86,044 73,700

Creditors: amounts falling due after
more than one year (37,741) (30,444)

Provision for liabilities and charges (7,031) (6,112)

(44,772) (36,556)

41,272 37,144

Capital and reserves
Called up share capital 1,717 1,716
Share premium account 7,692 7,674
Profit and loss account 3 31,863 27,754

Shareholders' funds – equity interests 41,272 37,144

CONSOLIDATED CASH FLOW STATEMENT
for the half year to 30 September 2003

Half year to Half year to Year to
30 September 30 September 31 March
2003 2002 2003
(unaudited) (unaudited) (audited)
Note #'000 #'000 #'000

Net cash inflow from operating activities 4 19,939 13,523 33,713
Returns on investment and
servicing of finance
Interest paid: bank and other loans (333) (700) (1,054)
Interest received: bank 96 10 65
(237) (690) (989)

Taxation
Corporation tax paid (1,462) (1,450) (2,283)
Capital expenditure and financial investment
Purchase of tangible fixed assets (19,008) (23,372) (36,398)
Disposal of tangible fixed assets 453 259 189

(18,555) (23,113) (36,209)

Equity dividends paid (1,463) (1,463) (2,094)

Cash outflow before financing (1,778) (13,193) (7,862)

Financing
Share capital issued 15 15 15
Other loans repaid (5,777) (10,907) (3,103)
Bank loans repaid – (173) (1,594)
Other loans advanced 12,941 28,699 18,612
Finance lease capital – (131) (196)

7,179 17,503 13,734

Increase in cash in the period 5,401 4,310 5,872

NOTES TO THE INTERIM RESULTS
at 30 September 2003

1. Turnover

Half year to Half year to Year to
30 September 30 September 31 March
2003 2002 2003
(unaudited) (unaudited) (audited)
#'000 #'000 #'000

Distribution 58,005 61,732 119,154
Aviation Services 61,656 41,853 79,022

119,661 103,585 198,176

Turnover arising within:
The United Kingdom and the Channel Islands 116,374 100,605 192,072
Mainland Europe 2,753 2,484 5,077
The Far East 534 496 1,027

119,661 103,585 198,176

Analyses of profit before taxation and net assets between the different segments
of the Group are not given as, in the opinion of the directors, such analyses
would be seriously prejudicial to the commercial interests of the Group.

2. Net Interest Payable

Half year to Half year to Year to
30 September 30 September 31 March
2003 2002 2003
(unaudited) (unaudited) (audited)

#'000 #'000 #'000
On bank loans and overdrafts (178) (30) (326)
On other loans (265) (670) (967)
Other interest payable – – (22)

(443) (700) (1,315)
Interest receivable 96 10 65

(347) (690) (1,250)
Interest capitalised within tangible fixed assets 110 97 261

(237) (593) (989)

3. Profit and loss account

Half year to Year to
30 September 31 March
2003 2003
(unaudited) (audited)
#'000 #'000

Balance at the beginning of the period 27,754 24,921
Retained profit for the period 4,122 2,825
Currency translation differences (13) 8
31,863 27,754

NOTES TO THE INTERIM RESULTS
at 30 September 2003

4. Reconciliation of operating profit to net cash flow from
operating activities

Half year to Half year to Year to
30 September 30 September 31 March
2003 2002 2003
(unaudited) (unaudited) (audited)
#'000 #'000 #'000

Operating profit 6,917 6,008 8,325
Depreciation 13,033 7,120 15,341
Amortisation of goodwill 248 248 497
Decrease/(increase) in stock 153 (102) 55
Increase in debtors (2,265) (1,568) (1,164)
Increase in creditors 1,866 1,823 10,651
Exchange differences (13) (6) 8

19,939 13,523 33,713

5. Reconciliation of net cash flow to movement in net debt

Half year to Half year to Year to
30 September 30 September 31 March
2003 2002 2003
(unaudited) (unaudited) (audited)
#'000 #'000 #'000

Increase in cash in the period 5,401 4,310 5,872
Cash inflow from increase in net debt in the period (7,164) (17,489) (13,719)

Change in net debt in the period (1,763) (13,179) (7,847)
Exchange differences 1,467 2,628 2,183
Net debt at 1 April (28,167) (22,503) (22,503)

Net debt at end of period (28,463) (33,054) (28,167)

6. Other matters

The financial information for the year to 31 March 2003 does not constitute
statutory accounts, as defined in Section 240 of the Companies Act 1985, but
is based on the statutory accounts for the year then ended. Those accounts,
upon which the auditors issued an unqualified opinion, have been delivered to
the Registrar of Companies.

The accounts to 30 September 2003 have been prepared using accounting policies
consistent with those adopted for the year to 31 March 2003.

Basic earnings per share has been calculated by reference to earnings of
#4,758,000 (2002 : #3,621,000) and a weighted average number of ordinary shares
in issue of 34,340,047 (2002: 34,320,676).

This report is being sent to all shareholders and copies are available from the
Company Secretary at the registered office of the Company, Building 470,
Bournemouth International Airport, Christchurch, Dorset, BH23 6SE.

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