TIDMJET2
RNS Number : 1034F
Jet2 PLC
06 July 2023
Jet2 plc
PRELIMINARY UNAUDITED RESULTS FOR YEARED 31 MARCH 2023
Jet2 plc , the Leisure Travel group (the "Group" or the
"Company"), announces its preliminary results for the year ended 31
March 2023.
Group financial highlights 2023 2022 2020 Change
Unaudited 2023
vs 2020
Revenue GBP5,033.5m GBP1,231.7m GBP3,584.7m 40%
-------------------------------------------------- ------------ ------------ ------------ -----------
Operating profit / (loss) GBP394.0m (GBP323.9m) GBP293.0m 34%
-------------------------------------------------- ------------ ------------ ------------ -----------
Profit / (loss) before hedge ineffectiveness,
FX revaluation and taxation GBP390.8m (GBP376.2m) GBP264.2m 48%
-------------------------------------------------- ------------ ------------ ------------ -----------
Profit / (loss) before taxation GBP371.0m (GBP388.8m) GBP153.2m 142%
-------------------------------------------------- ------------ ------------ ------------ -----------
Profit / (loss) for the period
after taxation GBP290.8m (GBP315.4m) GBP116.0m 151%
-------------------------------------------------- ------------ ------------ ------------ -----------
Basic earnings per share 135.4p (147.0p) 77.9p 74%
-------------------------------------------------- ------------ ------------ ------------ -----------
Final dividend per share 8.0p - - 100%
-------------------------------------------------- ------------ ------------ ------------ -----------
* The rebound in consumer confidence to travel helped underpin
a significantly improved financial performance as Group profit
before FX revaluation and taxation increased to GBP390.8m (2022:
GBP376.2m loss ) which was 48% higher than the pre-Covid financial
year ended 31 March 2020 reporting period.
* Jet2.com flew a total of 16.22m (2022: 4.85m) single sector
passengers, an increase of 234%, with higher margin package
holiday customers representing 64.9% of overall flown passengers
(2022: 51.3%) which was also 13.2 ppts higher than 2020.
* Pleasingly, average load factor achieved was 90.5% (2022: 69.2%)
on a 156% increase in seat capacity to 17.93m (2022: 7.01m),
underlining the popularity of our leisure travel products.
* Despite having absorbed delay and associated compensation costs
in excess of GBP50.0m as a direct impact of the broader disruption
seen across the aviation sector and its supply chains in mid-summer
2022, Group operating profit increased by 222% to GBP394.0m
(2022: GBP323.9m loss).
* Total cash balances at the year-end of GBP2,624.7m (2022: GBP2,228.5m)
increased 18%. 'Own Cash' which excludes advance customer deposits,
increased by 4% to GBP1,127.1m (2022: GBP1,083.8m).
* In view of the positive financial performance and in keeping
with its previous principle of paying a moderate dividend,
the Board has resolved to pay a final dividend of 8.0p per
share (2022: nil).
* In March 2023, the Group was delighted to take delivery of
the first of its 98 firm ordered Airbus A321/A320neo aircraft,
which could eventually extend up to 146 aircraft.
* In April 2023, the Group announced an equity investment in
a new SAF production plant to be constructed in the North West
of England - one of the first such deals in UK aviation.
* We recently announced our intention to commence operations
from Liverpool John Lennon Airport from March 2024 - our eleventh
UK base.
* On sale seat capacity for Summer 2023 is currently 7.5% higher
than Summer 2022 at 15.29m seats. Although average load factors
are currently 0.8ppts behind Summer 2022 at the same point,
positively the mix of higher margin Package Holiday customers
represents over 73% of total departing passengers at present,
which is over 5ppts higher than Summer 2022.
* Despite the Group facing various input cost pressures, pricing
to date for both our package holidays and flight-only products
has been robust and consequently margins per booked passenger
satisfactory.
* We are cognisant of how quickly the macro-economic environment
is evolving and how this may affect consumers' future spending.
However, we continue to believe that the end-to-end package
holiday is a resilient and popular product, particularly during
difficult economic times.
* For the long term, our strategy remains consistent - To be
the UK's Leading and Best Leisure Travel Business - with 'People,
Service, Profits' serving as our guiding principles. Put simply,
our Customers want to be looked after throughout their eagerly
anticipated holiday experience by a happy, well paid and motivated
team of Jet2 Colleagues who continue to deliver outstanding
service, thereby generating sustainable long-term profitability
- in short, Nothing Beats a Jet2holiday!
Further information on the calculation of this measure can be
found in Note 6.
Analyst and Investor call
The management team will host an investor and analyst conference
call at 9.00am UK time, on Thursday, 6th July 2023. For dial-in
details for the conference call, please contact Buchanan
Communications in advance to register: Jet2@buchanan.uk.com.
OUR CHAIRMAN'S STATEMENT
The conclusion of the Covid-19 pandemic and the unprecedented
challenges faced by everyone during it, unleashed an enormous surge
of pent-up demand for those experiences that consumers had truly
missed in the preceding two years. One of the most important of
these experiences was the opportunity to enjoy a much deserved,
rejuvenating and relaxing overseas holiday.
And I am pleased to say, that despite a difficult return to
normal operations, primarily due to the lack of planning and
preparedness of many airports and associated suppliers, our UK
Leisure Travel Business - which encompasses Jet2holidays, our
acclaimed ATOL licensed package holidays provider, and Jet2.com,
our award-winning airline - responded determinedly to provide our
Customers with their eagerly anticipated Real Package Holidays from
Jet2holidays(R).
Results for the financial year
The resumption of international travel in early 2022 resulted in
the Group's financial performance for the year ended 31 March 2023
exceeding our pre-pandemic performance for the year ended 31 March
2020.
The positive progress reflects the decisions made in late 2021
to retain over 8,000 loyal Colleagues throughout the pandemic,
recruiting and training in good time for Summer 2022, making early
and substantial marketing investments and giving meaningful salary
increases to all Colleagues. It also demonstrates the robust and
sustainable nature of our business model.
For the reporting period, seat capacity increased 13% against
2020 and buoyant customer demand resulted in the business achieving
an average load factor of 90.5% (2020: 92.2%). Higher margin
Package Holiday customers grew by 40% to 5.29m (2020: 3.77m) and
were a materially higher mix of total departing passengers at 64.9%
(2020: 51.7%), with Flight-Only passengers reducing by 19% to 5.69m
(2020: 7.06m).
Despite being very well prepared for our summer operations, plus
the exceptional dedication of our Colleagues who consistently went
above and beyond to ensure our Customers could finally embark on
their long-awaited holidays, regrettably some Customers experienced
frustrating delays. These hold ups were a direct consequence of the
widespread disruption experienced throughout the aviation sector,
including but not limited to ground handling suppliers' poor
customer service, long queues for airport security checks and
bottlenecks in baggage handling areas, all of which led to extreme
levels of airport congestion. Consequently, delay and associated
compensation costs under Regulation EU261 UK, exceeded
GBP50.0m.
Despite these challenges, we were very proud that Jet2.com
earned the accolade of being the only UK airline not to cancel a
flight during July and August 2022, according to leading travel
intelligence company, OAG - we were determined that our Customers
should enjoy their well-deserved holidays!
Similarly, the financial performance of our in-flight retail
operation was weaker than expected during early Summer 2022. This
was largely attributable to inadequate onboard product availability
caused by resource limitations at our third-party in-flight retail
provider.
However, despite having absorbed these substantial disruption
costs, I am pleased to report that Group profit before FX
revaluation and taxation increased to GBP390.8m (2022: GBP376.2m
loss ) which was also 48% higher than the financial year ended 31
March 2020, the last pre-Covid reporting period.
After accounting for net FX revaluation losses of GBP19.8m
(2022: GBP12.6m), total profit before taxation was GBP371.0m (2022:
GBP388.8m loss).
Further information on the calculation of this measure can be
found in Note 6.
Dividend
Prior to the pandemic, and subject to satisfactory financial
performance, the Board traditionally paid a modest dividend whilst
seeking to re-invest the majority of cash generated in growing the
business. For the year, basic earnings per share were 135.4p (2022:
(147.0p)) and in view of the positive financial performance and in
keeping with its previous principle, the Board has resolved to pay
a final dividend of 8.0p per share (2022: nil). This final dividend
is subject to shareholders' approval at the Company's Annual
General Meeting on 7 September 2023 and will be payable on 25
October 2023 to shareholders on the register at the close of
business on 22 September 2023, with the ex-dividend date being 21
September 2023.
Our Strategy
To be the UK's Leading and Best Leisure Travel business
In February 2003, Jet2.com proudly welcomed its first Customers
onboard, and over 100 million happy holidaymakers later, we were
thrilled to celebrate our 20th anniversary in February 2023, with
Jet2holidays now the UK's largest package holiday provider and
Jet2.com the UK's 3rd largest airline by number of passengers
flown.
While many aspects have evolved in the intervening years, our
unwavering commitment to our "Customer First" ethos has remained
steadfast and is what has driven Jet2's continuing success. At the
core of Jet2holidays and Jet2.com brand values lies the dedication
to delivering exceptional service. We recognise that whether our
Customers choose to embark on end-to-end Real Package Holidays from
Jet2holidays(R), or simply enjoy a holiday flight with Jet2.com,
providing an appealing and memorable holiday experience fosters
loyalty and encourages repeat bookings.
Our long-term ambition remains: To be the UK's Leading and Best
Leisure Travel business. Achieving this objective demands a clear
strategic vision and an unwavering customer focus, accompanied by
consistent and often material investment.
New Aircraft Order
In October 2022 we were pleased to announce that we were
entering into a further agreement with Airbus to purchase another
35 new firm ordered Airbus A321/A320neo aircraft with the ability
for this to extend up to 71 aircraft. Combined with existing
orders, this brings the total number of firm ordered Airbus
A321/A320neo aircraft for the Group to 98, which could eventually
extend up to 146 aircraft. Critically, this agreement ensures
certainty of supply well into the next decade.
The Group was delighted to take delivery of the first of these
aircraft in March 2023. With a spacious cabin capacity for 232
passengers and operational advantages through reduced fuel
consumption and resultant carbon emissions per seat, plus a much
lower noise footprint against previous generation single aisle
aircraft models, these aircraft will enable Jet2.com and
Jet2holidays to grow more sustainably. We are certain that the
introduction of the A321/A320neo aircraft will ensure that our
Customers continue to have a wonderfully comfortable and enjoyable
experience for many years to come.
Investment in Sustainable Aviation Fuel
As a socially and environmentally responsible airline and tour
operator, we take our environmental impact seriously. We firmly
believe that Sustainable Aviation Fuel ("SAF") is currently one of
the most effective solutions for reducing carbon emissions and is
key to achieving net-zero status by 2050. Consequently, in April
2023, the Group announced an equity investment in a new SAF
production plant to be constructed in the North West of England -
one of the first such deals in UK aviation. The Fulcrum NorthPoint
facility, being developed by Fulcrum BioEnergy Ltd, will operate as
a Waste-to-Fuels plant, and is anticipated to commence SAF
production by 2027. Once operational, Jet2.com will receive a
significant volume of SAF from the plant and expects to achieve net
emissions reductions totalling approximately 400,000 tonnes of
CO(2) over the 15-year period of the agreement.
New Training Facility
In February 2023, we were pleased to announce a new Airbus A321
flight simulator and training centre at Cheadle, near Manchester
Airport. The new centre builds on the success of the Company's
first training centre near Bradford, which opened in 2014. This
bespoke facility will provide a centre of excellence for existing
and new pilots, engineers, cabin crew and ground operations
Colleagues. The three-storey building will house full and
fixed-base flight simulators, cabin crew trainer units, engineering
training devices to enact real-life scenarios, high-tech computer
based training rooms, fully equipped classrooms and briefing rooms.
The centre enables Jet2.com to underpin its growth ambitions by
training thousands of Colleagues each and every year.
New UK Base
Finally in May 2023, we were delighted to announce the launch of
our highly acclaimed flights and holidays from Liverpool John
Lennon Airport. This development marks a significant milestone as
it becomes our eleventh UK base and is aligned with our long-term
strategy to sustainably grow our successful business.
Recognising the significant demand from both consumers and
independent travel agents across Liverpool, Merseyside and the
wider region, we are looking forward to commencing operations from
March 2024. Between now and then, our focus is on meticulous
preparation to ensure a seamless launch, so that from day one we
can provide Customers with the same award-winning service which has
delighted millions of others across the UK for so many years!
Nothing Beats a Jet2holiday!
Our Customers
We deeply appreciate the trust that our Customers place in us to
provide them with an exceptional holiday experience, and there is
no better validation of our performance than the recognition
received from the consumer champion Which? and its members.
We take immense pride in the fact that Jet2.com, Jet2holidays,
and Jet2CityBreaks continue to hold the distinguished status of
being Which? Recommended Providers, reflecting our unwavering
commitment to delivering exceptional service. Additionally in July
2023, Jet2Villas was named as a Which? Recommended Provider for the
first time - a great achievement. We are also delighted that
Jet2.com and Jet2holidays have recently been honoured as Travel
Brand of the Year 2023 by Which?, marking the second consecutive
year and the third time in six years that we have received this
prestigious accolade. This recognition acknowledges our dedication
to prioritising our Customers' satisfaction, both throughout the
challenging period of the pandemic and following the resumption of
international travel.
We understand that during times of uncertainty, consumers seek
operators they can trust and who offer them the best value for
their money. Therefore, our total focus leading up to Summer 2023
has been on delivering the same industry-leading levels of customer
service that our Customers have come to expect from us.
With this in mind, we have assumed direct control of all
ground-handling operations (check-in; baggage handling and aircraft
despatch) at a further two of our UK bases: Bristol and Newcastle -
this means we now independently 'self-handle' at seven of our
eleven UK bases and our Colleagues now control and manage passenger
check-in at all but one of our UK bases. This expansion ensures a
seamless and efficient experience for our valued Customers and
eliminates any reliance on third parties for these crucial aspects
of our operations.
As a result of our unwavering focus to do what is right for our
Customers, we are confident they will be even more determined to
indulge in the wonderful experience of a well-deserved Jet2holiday
and we are fully committed to doing our very best to ensure that
each of them "has a lovely holiday".
Our Colleagues
At the core of our company culture lies a deep-rooted "Customer
First" ethos, guided by our principles of People, Service, Profits
- great and attentive customer service is where we aim to
excel.
Whether in the UK or Overseas, the ability of our Colleagues to
continuously display our Company's 'Take Me There' values (Be
Present; Create Memories; Take Responsibility; and Work As One Team
), is of paramount importance in upholding our standards. This
"Customer First" approach has set us apart and enabled us to be
consistently recognised as an industry leader for our outstanding
customer service.
Throughout the year, our Colleagues have worked tirelessly,
particularly during the challenging period of early Summer 2022.
The Board is hugely appreciative for their tremendous support and
efforts, which enabled Jet2.com and Jet2holidays to fulfil the
dreams of so many Customers, taking them on their well-deserved and
eagerly anticipated holidays.
To recognise the invaluable contribution our Colleagues made, we
were very pleased to award pay increases totalling 8% during the
year ended 31 March 2023 together with an end of summer season
'Thank You Bonus' of GBP1,000 each. We firmly believe that happy
and well paid Colleagues are fundamental to the future success of
our business and with this and the pressures of elevated inflation
levels in mind, we awarded a pay increase of 9% to them all for the
year ending 31 March 2024.
In addition, we launched our award-winning ShareSave Scheme in
September 2022, offering Colleagues the opportunity to become
shareholders in Jet2 plc, by granting options to acquire shares in
the Company at a discount to the prevailing August 2022 share
price, subject to the completion of three years' employment. The
take-up rate was in excess of 60% - a very pleasing outcome.
Finally, we are delighted that the successful financial
performance of the Group for the year ended 31 March 2023 has
allowed us to reinstate both our Discretionary Colleague Profit
Share Scheme for non-management Colleagues and our Discretionary
Bonus Scheme for management Colleagues. These payments, which will
be the first in four years due to the pandemic, will be made in the
July 2023 payroll.
The Board is dedicated to upholding our People, Service, Profits
ethos and is satisfied that the investment made in our Colleagues
has resulted in engaged and dedicated teams who are committed to
carry on delivering the outstanding "Customer First" service that
means so much to our Customers, and which has contributed
immeasurably to our long-term success.
Our Stakeholders
Suppliers
We recognise the importance of cultivating strong relationships
with our many suppliers to realise our growth objectives. We were
delighted to be able to resume our annual supplier conference where
we focused on how we and our supplier partners can work together
effectively to forge mutually beneficial long-term relationships.
These strong partnerships are proving crucial as we head towards
our peak flying operation in Summer 2023.
We also acknowledge the importance of timely and full payment to
our suppliers, including of course our hotel partners, to underpin
their financial well-being. In accordance with the 'Duty to report
on payment practices and performance' legislation, the average
invoice payment period during the year reduced to 20.2 days (2022:
23.9 days) for Jet2.com Limited and to 22.7 days (2022: 27.5 days)
for Jet2holidays Limited.
Shareholders
We maintain open lines of communication with our shareholders
and institutional investors, engaging with them appropriately
through regular interactions such as at Preliminary and Interim
results meetings, individual investor meetings,
broker/institutional conferences and at our Annual General
Meeting.
UK Government and the Civil Aviation Authority
The Executive Directors and certain senior managers within the
organisation regularly engage with senior representatives of the UK
government and regulatory bodies. In the past year, discussions
focused on addressing the operational disruption faced by the
aviation industry in the early stages of the Summer 2022 season, as
well as numerous meetings with the government and industry
associations on the future of sustainable air travel. Furthermore,
our Chief Executive Officer actively engages with government,
business and tourism bodies in the UK and in our destination
countries, fostering relationships at both national and regional
levels.
In addition, our Group Chief Financial Officer has regular
dialogue with the UK Civil Aviation Authority on the financial
performance of the Group and our Accountable Manager, the Managing
Director of Jet2.com, meets regularly with his respective
counterparts.
Our Commitment to Sustainability
As a major provider of leisure travel in the UK, taking millions
of people away on holiday, Jet2 plc aspires to be "the leading
brand in sustainable air travel and package holidays".
Consequently, we endeavour to operate in the most efficient and
sustainable manner possible, focusing on minimising both emissions
and carbon intensity (emissions per passenger kilometre) and we
continue to make steady progress against the targets published in
our Sustainability Strategy in September 2021.
In addition to the significant investment made in new Airbus
aircraft which extends well into the next decade, and our
commitment to long-term SAF production, our efficient operations
also contribute to minimising our environmental impact in terms of
noise and air quality pollutants. These efforts are integral to our
journey towards achieving our Jet2 Net Zero 2050 commitment.
Following the return to more normalised levels of flight
activity and pre-pandemic load factors, the Group successfully
reduced its CO(2) emissions per passenger kilometre from 67.0g in
2019 to 65.9g, representing positive progress towards our 2025
target of 65.0g.
Jet2 plc fully complies with both national and international
efforts aimed at combatting climate change, which include the UK
and EU Emission Trading Schemes (ETS) and the Carbon Offsetting and
Reduction Scheme for International Aviation (CORSIA). In addition,
during the year the Group offset all emissions not covered by UK
and EU ETS existing carbon pricing mechanisms. This equated to
voluntary offsets of over 1.5m tonnes of carbon emissions. We were
delighted to work with our offsetting partner, Vertis, in selecting
projects including the Darajat Geothermal Project in Indonesia and
the Aksu Wind Power Project in Türkiye, ensuring that the
real-world impact of our carbon offsetting program is
maximised.
Following consistent investment, 47% of our Ground Support
Equipment now operates on zero-carbon technology, and we have
achieved an 80% reduction in single-use plastics on our aircraft as
compared to 2019 - equivalent to removing 11 million items per
annum!
Finally, Jet2holidays is acting on the environmental impacts in
its supply chain by continuing discussions with its hotel partners
and the Global Sustainable Tourism Council to implement a hotel
sustainability labelling scheme, thereby enabling Customers to make
more sustainable accommodation choices. More detailed information
on the Group's Sustainability Strategy can be found at
www.jet2plc.com/sustainability .
Our Board
The Board acknowledges its responsibility for ensuring the
enduring prosperity of the Group. This includes overseeing its
effective management and being accountable to shareholders by
making decisions that generate both long-term value and ensure that
the foundations of the business remain strong and sustainable in an
ever-changing marketplace.
Consequently in April 2023, the Board was very pleased to
announce the appointments of Simon Breakwell and Angela Luger as
independent Non-Executive Directors of the Company with effect from
27 April and 3 July 2023 respectively. Their extensive expertise
aligns perfectly with the current phase of our growth, and we have
full confidence in their ability to make substantial contributions
to the success of our business as we continue our focus on People,
Service, Profits.
Outlook
On sale seat capacity for Summer 2023 is currently 7.5% higher
than Summer 2022 at 15.29m seats. Although average load factors are
currently 0.8ppts behind Summer 2022 at the same point, positively
the mix of higher margin Package Holiday customers represents over
73% of total departing passengers at present, which is over 5ppts
higher than Summer 2022.
Despite the Group facing various input cost pressures such as
fuel, carbon taxes, a strengthened US dollar and wage increases, as
well as investment to support the well-being and work-life balance
of our Colleagues, pricing to date for both our package holidays
and flight-only products has been robust and consequently margins
per booked passenger satisfactory.
Looking forward, although we continue to believe that the
end-to-end package holiday is a resilient and popular product,
particularly during difficult economic times and o ur ability to
offer truly variable duration holidays enables our Customers to
tailor their holiday plans to suit their individual budgets, we are
cognisant of how quickly the macro-economic environment is evolving
and how this may affect consumers' future spending.
On that basis, and with the peak summer months of July, August
and September not yet complete plus the majority of Winter
2023/2024 seat capacity still to sell, it remains premature as is
always the case at this time of year, to provide definitive
guidance as to Group profitability for the financial year ending 31
March 2024.
For the long term our strategy remains consistent - To be the
UK's Leading and Best Leisure Travel Business - with 'People,
Service, Profits' serving as our guiding principles. Put simply,
our Customers want to be looked after throughout their eagerly
anticipated holiday experience by a happy, well paid and motivated
team of Jet2 Colleagues who continue to deliver outstanding
service, thereby generating sustainable long-term profitability -
in short, Nothing Beats a Jet2holiday!
Philip Meeson
Executive Chairman
6 July 2023
BUSINESS & FINANCIAL REVIEW
The Group's financial performance for the year ended 31 March
2023 is reported in accordance with UK-adopted international
accounting standards and applicable law.
Summary Income Statement 2023 2022 2020 Change
GBPm GBPm GBPm 2023
Unaudited vs 2020
Revenue 5,033.5 1,231.7 3,584.7 40%
Net operating expenses (4,639.5) (1,555.6) (3,291.7) (41%)
------------------------------------------------- ------------------- -------------------- ---------- ---------
Operating profit / (loss) 394.0 (323.9) 293.0 34%
Net financing expense (excluding Net FX
revaluation losses) (5.8) (53.4) (29.5) 80%
Profit on disposal of property, plant and
equipment 2.6 1.1 0.7 271%
------------------------------------------------- ------------------- -------------------- ---------- ---------
Profit / (loss) before hedge ineffectiveness,
FX revaluation and taxation 390.8 (376.2) 264.2 48%
Hedge ineffectiveness - - (108.4) 100%
Net FX revaluation losses (19.8) (12.6) (8.1) (144%)
------------------------------------------------- ------------------- -------------------- ---------- ---------
Profit / (loss) before taxation from continuing
operations 371.0 (388.8) 147.7 151%
Profit before taxation from discontinued
operations - - 5.5 (100%)
Profit / (loss) before taxation 371.0 (388.8) 153.2 142%
Net financing expense (including Net FX
revaluation losses) 25.6 66.0 37.6 32%
Depreciation 185.2 158.3 204.5 9%
Hedge ineffectiveness - - 108.4 100%
EBITDA from continuing operations* 581.8 (164.5) 498.2 17%
================================================= =================== ==================== ========== =========
* EBITDA is included as an alternative performance measure in
order to aid users in understanding the underlying operating
performance of the Group. Further information can be found in Note
6.
Customer Demand & Revenue
The rebound in consumer confidence to travel following the
resumption of international flying in early 2022 reaffirmed our
decision to invest well ahead of the Summer 2022 season to ensure
we had an ample and capable workforce available to deliver our
popular holiday offering.
As a result, on sale seat capacity for the Summer 2022 season
remained 14% higher than Summer 2019. This planning stability
allowed us to capitalise on the sustained customer demand,
particularly for our package holidays and, combined with a
resilient pricing environment and effective cost management, not
only resulted in a significantly improved financial performance
compared to the prior pandemic-impacted year, but also materially
surpassed the result achieved in the pre-pandemic year ended 31
March 2020.
D uring the financial year Jet2.com flew a total of 16.22m
(2022: 4.85m) single sector passengers, an increase of 234% with
customers choosing our end-to-end package holiday products
increasing by 310% to 5.29m (2022: 1.29m) assisted by certain high
volume, popular routes operating package-only flights.
Consequently, higher margin package holiday customers represented
64.9% of overall flown passengers (2022: 51.3%) which was 13.2 ppts
higher than 2020.
Pleasingly, average load factor achieved was 90.5% (2022: 69.2%)
on a 156% increase in seat capacity to 17.93m (2022: 7.01m),
underlining the popularity of our leisure travel products and the
resurgence in consumer confidence to travel, with load factors in
the latter months of the financial year broadly in line with those
of 2019/20.
Average flight-only ticket yield per passenger sector at
GBP100.28 (2022: GBP67.90) was 48% higher than the prior year, due
to changes in the mix of destinations flown, notably an increase to
those in the Eastern Mediterranean, combined with strong consumer
demand meaning fewer promotional offers were required.
The average price of a Jet2holidays package holiday increased by
10% to GBP761 (2022: GBP689) reflecting changes in destination mix
and favourable pricing driven by the consistently robust consumer
demand.
Non-Ticket Retail Revenue per passenger sector declined by 14%
to GBP25.99 (2022: GBP30.28). This decrease can be largely
attributed to the weaker than anticipated performance of our
in-flight retail operations, primarily due to resource limitations
at Jet2.com's third party in-flight retail supplier which affected
onboard product availability. Pleasingly, towards the end of summer
this disruption had largely abated and availability levels returned
to the high standards our Customers have come to expect and
enjoy.
As a result, overall Group Revenue increased by 309% to
GBP5,033.5m (2022: GBP1,231.7m).
Net Operating Expenses
Higher levels of flying activity led to a corresponding 250%
increase in direct operating expenses (including direct staff
costs) to GBP3,843.0m (2022: GBP1,099.3m), significantly lower than
the revenue growth.
It is important to note that this result was achieved despite
the severe operational challenges experienced during mid-Summer
2022 due to the lack of planning and investment by many airports
and their associated suppliers. Despite the tremendous efforts of
our Colleagues, this disruption led to a significant increase in
flight delays in excess of three hours deemed eligible under EU261
UK. As a result, delay and associated compensation costs exceeded
GBP50.0m, over 200% higher than those incurred in the financial
year ended 31 March 2020.
As a gesture of the Board's huge appreciation of their
tremendous efforts and support, all Colleagues received an end of
summer 'Thank You Bonus' of GBP1,000 in recognition of the strong
operational and financial performance achieved, despite the very
challenging circumstances.
Underlying wage costs increased as a result of an 8% pay award
made during the year, which recognised the fact that many had taken
up to a 20% pay cut for the majority of the pandemic period to
support the Company and also reflected the challenging inflationary
environment.
Additionally, the Group continued to invest significant monies
into colleague recruitment and training, not only to ensure it was
well-placed to capitalise on consumer demand, but also to support a
balanced lifestyle, particularly in operational areas.
The purchase of carbon allowances to satisfy our obligations
under the UK and EU ETS resulted in a total charge of GBP76.7m and
were acquired at an average price (excluding voluntary offsetting)
of GBP63.17, up by 14% on 2022 (GBP55.35) and 350% on 2020
(GBP14.03).
B rand and direct marketing investment was over GBP90.0m higher
than the previous year at approximately GBP220m as the business
ramped up activity post-pandemic to optimise load factors for
Summer 2022, and also drive customer bookings for Winter 2022/2023
and Summer 2023.
Pleasingly, the successful performance of the Group has meant
the reinstatement of both our Discretionary Colleague Profit Share
Scheme for non-management Colleagues at 6% of pre-tax profit and
Discretionary Bonus Scheme for management Colleagues. These
payments totalling approximately GBP45m, will be the first since
2019 due to the pandemic and will be made in the July 2023
payroll.
As a result, net operating expenses increased by 198% to
GBP4,639.5m (2022: GBP1,555.6m).
Operating profit
Overall Group operating profit for the year was GBP394.0m (2022:
GBP323.9m loss), a 34% increase on 2020 (GBP293.0m).
Net Financing Expense
Net financing expense of GBP25.6m (2022: GBP66.0m) is stated
after finance income of GBP58.7m (2022: GBP5.1m), which improved
materially due to higher levels of cash deposits coupled with
increases to central bank interest rates made over the course of
the financial year. Finance expenses of GBP64.5m (2022: GBP58.5m)
increased primarily due to annualisation of the interest expense on
the Group's convertible bond, which resulted in a cost of GBP17.3m
(2022: GBP13.6m) and additional interest incurred on lease
liabilities as a result of aircraft acquired to support further
fleet expansion.
In addition, a net FX revaluation loss of GBP19.8m (2022:
GBP12.6m) resulted from the year end revaluation of foreign
currency denominated monetary balances.
Statutory Profit for the Year
As a result, the Group made a statutory profit before taxation
of GBP371.0m (2022: GBP388.8m loss) which was over 150% higher than
the pre-pandemic performance in the year ended 31 March 2020.
Taxation
The Group recorded a tax charge of GBP80.2m (2022: GBP73.4m
credit), at an effective tax rate of 22% (2022: 19%). The Finance
Bill enacted on 10 June 2021 detailed a proposed increase in the
rate of corporation tax from 19% to 25% from 1 April 2023 and
consequently, the Group has provided for all deferred tax at 25%
(2022: 25%).
Statutory Net Profit for the year and Earnings Per Share
Consequently, the Group made a statutory profit after taxation
of GBP290.8m (2022: GBP315.4m loss) and basic earnings per share
were 135.4p (2022: (147.0p)).
Other Comprehensive Income and Expense
The Group had an Other comprehensive expense of GBP179.0m (2022:
GBP193.1m income); the change compared to the prior year primarily
due to the transfer to the consolidated income statement over the
course of the current year of hedged gains from in-the-money fuel
derivatives from the previous year.
Cash Flows and Financial Position
The Group continues to maintain a strong balance sheet with
significant liquidity which gives flexibility to pursue its growth
aspirations and to refresh certain of its aircraft fleet.
The following table sets out condensed cash flow data and the
Group's cash and cash equivalents and money market deposits:
Summary of Cash Flows 2023 2022 2020 Change
GBPm GBPm GBPm 2023
vs 2020
Unaudited
EBITDA from continuing operations 581.8 (164.5) 498.2 17%
EBITDA from discontinued operations - - 20.9 (100%)
Other Income Statement adjustments 7.8 3.0 (0.4) 2,050%
------------------------------------------- -------------------- ------------------- -------- ---------
Operating cash flows before movements
in working capital 589.6 (161.5) 518.7 14%
Movements in working capital 362.6 966.0 (21.5) 1,787%
Payment on settlement of derivatives - (15.5) - -
Interest and taxes (0.1) (38.0) (54.1) 100%
------------------------------------------- -------------------- ------------------- -------- ---------
Net cash generated from operating
activities 952.1 751.0 443.1 115%
Purchase of intangibles - - (26.8) 100%
Purchase of property, plant and equipment
and right-of-use assets (196.6) (108.4) (211.3) 7%
Movement on borrowings (287.7) 268.5 27.0 (1,166%)
Movement on lease liabilities (76.2) (67.5) (99.7) 24%
Dividends paid in the year (6.4) - (15.5) 59%
Other items 11.0 5.9 9.1 21%
------------------------------------------- -------------------- ------------------- -------- ---------
Net increase in cash and money market
deposits (a) 396.2 849.5 125.9 215%
=========================================== ==================== =================== ======== =========
(a) Cash flows are reported including the movement on money
market deposits (cash deposits with maturity of more than three
months from point of placement) to give readers an understanding of
total cash generation. The Consolidated Statement of Cash Flows
reports net cash flow excluding these movements. Further
information on these balances as at the year-end can be found in
Note 6.
Net Cash Generated From Operating Activities
The Group generated operating cash inflows before working
capital movements of GBP589.6m (2022: GBP161.5m outflow) primarily
driven by the Leisure Travel business trading performance which
resulted in EBITDA improving to GBP581.8m (2022: EBITDA of
GBP164.5m loss).
In addition, movements in working capital resulted in cash
inflows of GBP362.6m (2022: GBP966.0m), principally due to holding
higher levels of customer cash deposits than the prior year from
much improved forward bookings and an increase in trade and other
payables due to increased operational activity in the final quarter
of the year as compared to the previous year. After net interest
received of GBP15.1m (2022: GBP38.4m paid) and corporation tax
payments of GBP15.2m (2022: GBP0.4m refunded), the Group generated
GBP952.1m of cash from its operating activities (2022:
GBP751.0m).
Net Cash Used In Investing Activities
Total capital expenditure amounted to GBP196.6m (2022:
GBP108.4m) primarily representing pre-delivery payments made for
the Group's Airbus A321/A320neo order and including the balance
payment for the first Airbus A321neo delivery received in March
2023. Additionally, we continued to invest in the ongoing
maintenance of our existing aircraft fleet, ensuring its long-term
reliability and performance. Furthermore, we were delighted to
acquire a second flight simulator and training centre near our
Manchester Airport base. This bespoke facility will serve as an
additional dedicated training hub for our pilots, cabin crew,
engineers and other operational functions as we continue to grow
over the coming years. Finally, as part of our commitment to
achieve the targets set out within our Sustainability Strategy, we
continued to invest in improving the carbon efficiency of our
ground service equipment at our UK bases, transitioning from
combustion engine to electric (either fully electric or hybrid)
powered alternatives.
Net Cash Used In Financing Activities
Net cash used in financing activities amounted to GBP370.3m
(2022: GBP201.0m cash generated from financing activities)
following repayments of borrowings and lease liabilities of
GBP363.9m (2022: GBP327.0m), which included repayment of the
existing GBP65.0m Revolving Credit Facility ("RCF") and early
repayment of a GBP150.0m short term loan taken out during the
pandemic, and an interim dividend payment of GBP6.4m (2022: nil).
There were no new loans advanced during the year (2022:
GBP528.0m).
Other items totalling an inflow of GBP11.0m (2022: GBP5.9m) are
largely driven by the effect of foreign exchange rate changes on
the Group's cash and money market deposit balances totalling
GBP8.3m (2022: GBP4.8m) and GBP2.7m proceeds from engine sales
(2022: GBP1.1m).
Overall, this resulted in a net cash inflow of GBP396.2m (2022:
GBP849.5m) and a year-end gross cash position (including money
market deposits) of GBP2,624.7m (2022: GBP2,228.5m). Net cash,
stated after borrowings and lease liabilities increased by 90% to
GBP1,249.7m (2022: GBP658.3m).
At the reporting date, the Group had received payments in
advance of travel from its Leisure Travel customers amounting to
GBP1,497.6m (2022: GBP1,144.7m) and had increased its 'Own Cash'
balance to GBP1,127.1m (2022: GBP1,083.8m).
Further information on the calculation of this measure can be
found in Note 6.
Liquidity
The Group maintains a robust financial position, characterised
by a strong balance sheet and ample liquidity. This financial
strength gives the flexibility to pursue our growth ambitions,
comfortably repay our borrowings and to renew certain aircraft
within our fleet.
In October 2022, the Group successfully renegotiated its RCF,
with the addition of one new financing partner, National
Westminster Bank plc, alongside our three existing supportive
relationship banks: Barclays Bank plc; HSBC UK Bank plc; and Lloyds
Bank plc. The new RCF, which remains undrawn, provides the Group
with unsecured available facilities of up to GBP300m and represents
an increase of GBP200m from the previous arrangement.
An important feature of the new facility is its sustainability
focus. Commencing 1 April 2023, it will be linked via a margin
ratchet adjustment to sustainability criteria, specifically the
Group's key climate metric - gCO2 per passenger kilometre aircraft
fuel burn. This integration of sustainability targets into our
financing structure underscores our commitment to addressing the
climate impact and aligning our financial operations with our
environmental objectives.
Summary Statement of Financial 2023 2022 2020 Change
Position
GBPm GBPm GBPm 2023 vs
2020
Unaudited
---------------------------------- -------------------- ---------- -------- --------
Non-current assets (a) 1,519.8 1,363.9 1,492.7 2%
Net liabilities (b) (115.0) (87.6) (138.7) 17%
Cash and money market deposits 2,624.7 2,228.5 1,387.5 89%
Deferred revenue (1,563.6) (1,189.1) (745.2) (110%)
Borrowings (729.2) (991.7) (485.7) (50%)
Lease liabilities (645.8) (578.5) (672.7) 4%
Deferred taxation (36.7) (12.6) (78.7) 53%
Derivative financial instruments (41.8) 163.7 (191.5) 78%
Assets held for sale - - 66.4 (100%)
Total shareholders' equity 1,012.4 896.6 634.1 60%
================================== ==================== ========== ======== ========
(a) Stated excluding derivative financial instruments.
(b) Stated excluding cash and cash equivalents, money market
deposits, deferred revenue, borrowings, lease liabilities and
derivative financial instruments.
Total shareholders' equity increased by GBP115.8m (2022:
GBP67.6m decrease) which included the profit after taxation of
GBP290.8m (2022: GBP315.4m loss). This was partially offset by a
net movement within the cash flow hedging and cost of hedging
reserves of GBP182.9m, notably the crystallisation of prior year
in-the-money fuel derivatives during the year.
Our Leisure Travel business emerged from the pandemic at the
beginning of 2022 firmly on the front foot, made possible by its
strong Own Cash position, a well-capitalised Balance Sheet and a
highly committed, skilled workforce. These invaluable resources
have helped steer the Group through a phased recovery to more
normalised levels of operational activity. Moreover, they form the
bedrock of our growth ambitions for the coming years.
In addition, the strength of our balance sheet means the Group
is well positioned to capitalise on the growth opportunities that
we believe exist for our exciting and dynamic business, but also
provides us with the necessary financial resilience to adapt to and
navigate potential challenges should they arise.
Gary Brown
Group Chief Financial Officer
6 July 2023
Leisure Travel Key Performance Change
Indicators 2023 vs
2023 2022 2020 2020
---------------------------------------- ------------ ------------ ------------ -----------
Leisure Travel sector seats available
(capacity) 17.93m 7.01m 15.85m 13%
Leisure Travel passenger sectors
flown 16.22m 4.85m 14.62m 11%
Leisure Travel load factor 90.5% 69.2% 92.2% (1.7 ppts)
Flight-only passenger sectors
flown 5.69m 2.36m 7.06m (19%)
Package holiday customers 5.29m 1.29m 3.77m 40%
Package holiday customers % of
total passenger sectors flown 64.9% 51.3% 51.7% 13.2 ppts
Flight-only ticket yield per passenger
sector (excl. taxes) GBP100.28 GBP67.90 GBP85.59 17%
Average package holiday price GBP761 GBP689 GBP687 11%
Non-ticket revenue per passenger
sector GBP25.99 GBP30.28 GBP24.91 4%
Fuel requirement hedged - next
12 months 81.8% 87.6% N/A N/A
Advance sales made as at 31 March GBP3,028.2m GBP2,396.0m GBP1,679.2m 80%
---------------------------------------- ------------ ------------ ------------ -----------
For further information please contact:
Jet2 plc
Philip Meeson, Executive
Chairman
Gary Brown, Group Chief 0113 239
Financial Officer 7692
Cenkos Securities plc
Nominated Adviser 020 7397
Katy Birkin / Camilla Hume 8900
Canaccord Genuity
Joint Broker 020 7523
Adam James 8000
Jefferies International
Limited
Joint Broker 020 7029
Ed Matthews / Becky Lane 8000
Buchanan
Financial PR
Richard Oldworth / Toto 020 7466
Berger 5000
COnsolidated income statement (unaudited)
for the year ended 31 March 2023
Results for Results for
the the
year ended year ended
31 March 2023 31 March 2022
GBPm GBPm
Revenue 5,033.5 1,231.7
Net operating expenses 3 (4,639.5) (1,555.6)
------------------------------------------ --------------- ---------------
Operating profit / (loss) 394.0 (323.9)
Finance income 58.7 5.1
Finance expense (64.5) (58.5)
Net FX revaluation losses (19.8) (12.6)
------------------------------------------ --------------- ---------------
Net financing expense 4 (25.6) (66.0)
Profit on disposal of property, plant
and equipment 2.6 1.1
Profit / (loss) before taxation 371.0 (388.8)
Taxation (80.2) 73.4
------------------------------------------ --------------- ---------------
Profit / (loss) for the year 290.8 (315.4)
(all attributable to equity shareholders
of the Parent)
========================================== =============== ===============
Earnings per share
- basic 5 135.4 p (147.0p)
- diluted 5 126.6 p (147.0p)
-------------------- -------- ---------
Consolidated statement of comprehensive income (UNAUDITED)
for the year ended 31 March 2023
Year ended Year ended
31 March 31 March
2023 2022
GBPm GBPm
------------------------------------------- ----------- -----------
Profit / (loss) for the year 290.8 (315.4)
Other comprehensive (expense) / income
Items that are or may be reclassified
subsequently to profit or loss:
Cash flow hedges:
Fair value (losses) / gains (49.4) 225.2
Net amount transferred to Consolidated
Income Statement (164.1) 22.4
Cost of hedging reserve - changes
in fair value (17.0) (8.0)
Related taxation credit / (charge) 47.6 (46.5)
Revaluation of foreign operations 3.9 -
------------------------------------------- ----------- -----------
(179.0) 193.1
Total comprehensive income / (expense)
for the year 111.8 (122.3)
(all attributable to equity shareholders
of the Parent)
=========================================== =========== ===========
Consolidated Statement of Financial Position (UNAUDITED)
at 31 March 2023
2023 2022
GBPm GBPm
Non-current assets
Intangible assets 26.8 26.8
Property, plant and equipment 927.7 845.2
Right-of-use assets 565.3 491.9
Derivative financial instruments 14.3 20.5
----------------------------------- --------
1,534.1 1,384.4
---------------------------------- -------- --------
Current assets
Inventories 40.2 8.5
Trade and other receivables 281.3 185.8
Derivative financial instruments 45.8 186.3
Money market deposits 1,669.5 1,181.0
Cash and cash equivalents 955.2 1,047.5
2,992.0 2,609.1
---------------------------------- -------- --------
Total assets 4,526.1 3,993.5
----------------------------------- -------- --------
Current liabilities
Trade and other payables 339.1 217.8
Deferred revenue 1,547.2 1,173.4
Borrowings 125.9 134.5
Lease liabilities 101.8 74.8
Provisions 57.4 41.8
Derivative financial instruments 85.1 39.6
2,256.5 1,681.9
---------------------------------- -------- --------
Non-current liabilities
Deferred revenue 16.4 15.7
Borrowings 603.3 857.2
Lease liabilities 544.0 503.7
Provisions 40.0 22.3
Derivative financial instruments 16.8 3.5
Deferred taxation 36.7 12.6
----------------------------------- --------
1,257.2 1,415.0
---------------------------------- -------- --------
Total liabilities 3,513.7 3,096.9
----------------------------------- -------- --------
Net assets 1,012.4 896.6
=================================== ======== ========
Shareholders' equity
Share capital 2.7 2.7
Share premium 19.8 19.8
Cash flow hedging reserve (15.3) 155.2
Cost of hedging reserve (17.9) (5.5)
Other reserves 55.2 51.3
Retained earnings 967.9 673.1
Total shareholders' equity 1,012.4 896.6
=================================== ======== ========
consolidated statement of cash flows (UNAUDITED)
for the year ended 31 March 2023
2023 2022
GBPm GBPm
Profit / (loss) before taxation 371.0 (388.8)
Net financing expense (including
Net FX revaluation losses) 25.6 66.0
Hedge ineffectiveness - 0.8
Depreciation 185.2 158.3
Profit on disposal of property, plant
and equipment (2.6) (1.1)
Equity settled share-based payments 10.4 3.3
Operating cash flows before movements
in working capital 589.6 (161.5)
-------------------------------------------- -------- ----------
Increase in inventories (31.7) (7.5)
Increase in trade and other receivables (117.5) (35.5)
Increase in trade and other payables 118.7 151.8
Increase in deferred revenue 374.5 866.7
Increase / (decrease) in provisions 18.6 (9.5)
Payment on settlement of derivatives - (15.5)
-------------------------------------------- -------- ----------
Cash generated from operations 952.2 789.0
-------------------------------------------- -------- ----------
Interest received 58.7 5.1
Interest paid (43.6) (43.5)
Income taxes (paid) / refunded (15.2) 0.4
Net cash generated from operating
activities 952.1 751.0
-------------------------------------------- -------- ----------
Cash used in investing activities
Purchase of property, plant and equipment (193.9) (107.9)
Purchase of right-of-use assets (2.7) (0.5)
Proceeds from sale of property, plant
and equipment 2.7 1.1
Net increase in money market deposits (481.9) (1,181.0)
Net cash used in investing activities (675.8) (1,288.3)
-------------------------------------------- -------- ----------
Cash (used in) / generated from financing
activities
Repayment of borrowings (287.7) (259.5)
New loans advanced - 147.9
Payment of lease liabilities (76.2) (67.5)
Proceeds on issue of convertible
bonds - 380.1
Dividends paid in the year (6.4) -
Net cash (used in) / generated from
financing activities (370.3) 201.0
-------------------------------------------- -------- ----------
Net decrease in cash in the year (94.0) (336.3)
Cash and cash equivalents at beginning
of year 1,047.5 1,379.0
Effect of foreign exchange rate changes 1.7 4.8
Cash and cash equivalents at end
of year 955.2 1,047.5
-------------------------------------------- -------- ----------
Consolidated statement of changes in equity (UNAUDITED)
for the year ended 31 March 2023
Share Share Cash flow Cost of Other Retained Total shareholders'
capital premium hedging hedging reserves earnings equity
reserve reserve
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------- --------- --------- ---------- --------- ---------- ---------- --------------------
Balance at 31
March 2021 2.7 19.8 (44.2) 0.8 (0.1) 985.2 964.2
Total comprehensive
expense - - 199.4 (6.3) - (315.4) (122.3)
Share-based payments - - - - - 3.3 3.3
Issue of convertible
bonds (1) - - - - 51.4 - 51.4
Balance at 31
March 2022 2.7 19.8 155.2 (5.5) 51.3 673.1 896.6
Total comprehensive
income - - (170.5) (12.4) 3.9 290.8 111.8
Share-based payments - - - - - 10.4 10.4
Dividends paid
in the year - - - - - (6.4) (6.4)
Balance at 31
March 2023 2.7 19.8 (15.3) (17.9) 55.2 967.9 1,012.4
====================== ========= ========= ========== ========= ========== ========== ====================
(1) In June 2021, senior unsecured convertible bonds were issued
generating gross proceeds of GBP387.4m. The equity component of
these bonds was valued at GBP51.4m 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 GBP3.8m at 31 March 2023.
Notes to the UNAUDITED PRELIMINARY ANNOUNCEMENT
for the year ended 31 March 2023
1. Accounting policies and general information
Basis of preparation
The financial information in this preliminary announcement has
been prepared and approved by the Board of Directors in accordance
with UK-adopted international accounting standards and applicable
law ("UK-adopted IAS").
Whilst the information included in this preliminary announcement
has been prepared in accordance with UK-adopted IAS, the financial
information contained within this preliminary announcement for the
years ended 31 March 2023 and 31 March 2022 does not itself contain
sufficient information to comply with UK-adopted IAS, nor does it
comprise statutory financial statements within the meaning of
section 434 of the Companies Act 2006.
The financial information for 2022 is derived from the financial
statements for the year ended 31 March 2022, which have been
delivered to the Registrar of Companies. The Auditor has reported
on the year ended 31 March 2022 financial statements; their
report:
i. was unqualified.
ii. did not include a reference to any matters to which the
Auditor drew attention by way of emphasis without qualifying their
report; and
iii. did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The financial statements for the year ended 31 March 2023 will
be finalised on the basis of the financial information presented by
the Board of Directors in this preliminary announcement and will be
delivered to the Registrar of Companies in due course.
The 2023 Annual Report & Accounts (including the Auditor's
Report) will be made available to shareholders during the week
commencing 7 August 2023. The Jet2 plc Annual General Meeting will
be held on 7 September 2023.
The financial information has been prepared under the historical
cost convention except for all derivative financial instruments,
which have been measured at fair value.
The Group's financial information is presented in pounds
sterling and all values are rounded to the nearest GBP100,000
except where indicated otherwise.
Going concern
The Directors have prepared financial forecasts for the Group,
comprising profit before and after taxation, balance sheets and
cash flows through to 31 March 2026.
For the purpose of assessing the appropriateness of the
preparation of the Group's financial statements on a going concern
basis, two financial forecast scenarios have been prepared for the
12-month period following approval of these financial statements
:
-- A base case which assumes a full unhindered flying programme
utilising an aircraft fleet of 120 at load factors above 90%
against an 8% increase in seat capacity; and
-- A downside scenario with load factors reduced to 80% from
August 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 as
described in more detail in the Group's Annual Report &
Accounts, 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 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 GBP2,624.7m at 31
March 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 the
financial statements at the end of July 2023. In addition, the
Group is forecast to meet its RCF covenants at 30 September 2023
and 31 March 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 financial statements. For this reason, they
continue to adopt the going concern basis in preparing the
financial statements for the year ended 31 March 2023.
Accounting policies
The accounting policies adopted are consistent with those
described in the Annual Report & Accounts for the year ended 31
March 2022.
2. Segmental reporting
IFRS 8 - Operating segments requires operating segments to be
determined based on the Group's internal reporting to the Chief
Operating Decision Maker ("CODM").
The CODM is responsible for the overall resource allocation and
performance assessment of the Group. The Board of Directors
approves major capital expenditure, assesses the performance of the
Group and also determines key financing decisions. Consequently,
the Board of Directors is considered to be the CODM.
The information presented to the CODM for the purpose of
resource allocation and assessment of the Group's performance
relates to its Leisure Travel segment as shown in the Consolidated
Income Statement.
The Leisure Travel business specialises in offering package
holidays by its ATOL licensed provider, Jet2holidays, to leisure
destinations in the Mediterranean, the Canary Islands and to
European Leisure Cities, and scheduled holiday flights by its
airline, Jet2.com. Resource allocation decisions are based on the
entire route network and the deployment of its entire aircraft
fleet. All Jet2holidays customers fly on Jet2.com flights, and
therefore these segments are inextricably linked and represent the
only segment within the Group.
Revenue is principally generated from within the UK, the Group's
country of domicile. No customer represents more than 10% of the
Group's revenue. Segment revenue reported below represents revenue
generated from external customers.
Revenues for the Group can be further disaggregated by their
nature for the purposes of IFRS 15 as follows:
2023 2022
GBPm GBPm
Unaudited
---------------------------- ---------- --------
Package holidays 4,028.9 887.9
Flight-only ticket revenue 570.3 160.3
Non-ticket revenue 421.5 147.0
Other Leisure Travel 12.8 36.5
Total revenue 5,033.5 1,231.7
============================ ========== ========
3. Net operating expenses
2023 2022
GBPm GBPm
Unaudited
------------------------------------------------- ---------- --------
Direct operating costs:
Accommodation 1,973.6 473.5
Fuel 521.4 132.8
Landing, navigation and third-party handling 403.4 139.5
Agent commission 142.0 29.5
Maintenance 105.2 38.7
In-flight cost of sales 76.7 28.9
Carbon 76.7 11.0
Aircraft rentals (less than twelve months) 61.1 0.6
Other direct operating costs 190.1 53.6
Staff costs including agency staff 590.4 313.2
Depreciation of property, plant and equipment 118.9 105.2
Depreciation of right-of-use assets 66.3 53.1
Other operating charges 313.7 176.0
Total net operating expenses 4,639.5 1,555.6
================================================= ========== ========
4. Net financing expense
2023 2022
GBPm GBPm
Unaudited
----------------------------------------- ---------- -------
Finance income 58.7 5.1
Interest expense on aircraft loans (16.4) (16.0)
Interest expense on other loans (7.1) (7.7)
Interest expense on convertible bond (17.3) (13.6)
Interest expense on lease liabilities (23.7) (21.2)
----------------------------------------- ---------- -------
Finance expense (64.5) (58.5)
Net foreign exchange revaluation losses (19.8) (12.6)
----------------------------------------- ---------- -------
Total net financing expense (25.6) (66.0)
========================================= ========== =======
5. Earnings per share
Basic earnings per share is calculated by dividing the profit /
(loss) attributable to the equity owners of the Parent Company by
the weighted average number of ordinary shares in issue during the
year.
Diluted earnings per share is calculated by dividing the profit
/ (loss) attributable to the equity owners of the Parent Company by
the weighted average number of ordinary shares in issue during the
year, adjusted for the effects of potentially dilutive share
options and deferred awards, along with the potential conversion of
the convertible bonds to ordinary shares at maturity in June 2026.
In accordance with IAS 33, these were not included in the
calculation of diluted earnings per share for the year ended 31
March 2022, as they were anti-dilutive for that loss-making
period.
2023
Unaudited 2022
Earnings Weighted EPS Earnings Weighted EPS
GBPm average pence GBPm average pence
number number
of shares of shares
millions millions
------------------------------ --------- ----------- ------- --------- ----------- --------
Basic EPS
Profit / (loss) attributable
to ordinary shareholders 290.8 214.7 135.4 (315.4) 214.6 (147.0)
------------------------------ --------- ----------- ------- --------- ----------- --------
Effect of dilutive instruments
Share options and
deferred awards - 4.6 (2.8) - - -
Convertible bond 14.0 21.5 (6.0) - - -
Diluted EPS 304.8 240.8 126.6 (315.4) 214.6 (147.0)
------------------------------ --------- ----------- ------- --------- ----------- --------
6. 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 / (loss) before FX revaluation and taxation
Profit / (loss) before FX revaluation and taxation is included
as an alternative performance measure in order to aid users in
understanding the underlying operating performance of the Group
excluding the impact of foreign exchange volatility.
EBITDA
Earnings before interest, tax, depreciation and amortisation
(EBITDA) is included as an alternative performance measure in order
to aid users in understanding the underlying operating performance
of the Group.
These can be reconciled to the IFRS measure of profit / (loss)
before taxation as below:
2023 2022
GBPm GBPm
Unaudited
----------- --------
Profit / (loss) before taxation 371.0 (388.8)
Net FX revaluation losses 19.8 12.6
----------- --------
Profit / (loss) before FX revaluation
and taxation 390.8 (376.2)
Net financing expense (excluding Net FX
revaluation losses) 5.8 53.4
Depreciation of property, plant and equipment 118.9 105.2
Depreciation of right-of-use assets 66.3 53.1
----------- --------
EBITDA 581.8 (164.5)
=========== ========
'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.
2023 2022
GBPm GBPm
---------- ----------
Cash and cash equivalents 955.2 1,047.5
Money market deposits 1,669.5 1,181.0
---------- ----------
Cash and money market deposits 2,624.7 2,228.5
Deferred revenue (1,563.6) (1,189.1)
Trade and other receivables 66.0 44.4
---------- ----------
'Own Cash' 1,127.1 1,083.8
========== ==========
Trade and other receivables relates to invoicing of amounts due
from travel agents in respect of package holiday deposits and
balance payments.
7. Market Abuse Regulation (MAR) Disclosure
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.
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END
FR UVRNROKUBRAR
(END) Dow Jones Newswires
July 06, 2023 02:00 ET (06:00 GMT)
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