Dart Group Interim Results

Interim Results

Dart Group PLC the Leisure Airline, Package Holidays and Distribution & Logistics Group (the "Group"), announces its interim results for the half year ended 30 September 2012. These results are presented under International Financial Reporting Standards (IFRS).

Chairman's Statement

I am pleased to report on the Group's performance for the six months ended 30 September 2012 in its three businesses, Jet2.com, the North's leading leisure airline, Jet2holidays, the ATOL protected package holidays operator, and Fowler Welch, one of the UK's leading logistics providers. Group profit before tax was £57.0m, an increase of 37% on the previous half year (2011: £41.6m); turnover was up 31% at £584.5m (2011: £445.7m). The increase in profitability reflects a strong summer for Jet2.com, underpinned by the continued successful growth of Jet2holidays. With our leisure airline concentrating on great leisure cities, and Mediterranean and Canary Islands sun destinations, the business is becoming increasingly seasonal as it continues to grow; therefore higher losses are to be expected in the second half of the year.

Net cash flow from operations of £81.0m was generated in the period (2011: £10.7m). The increase over the previous half year reflects the impact of improved trading performance in both Jet2.com and Jet2holidays, together with significantly increased forward bookings for both this Winter and next Summer. Total capital expenditure amounted to £26.1m (2011: £10.6m), with this growth reflecting further investment in the Group's aircraft fleet.

Cash and money market deposits increased by £54.8m in the period (2011: £0.6m), resulting in a balance of £206.8m (2011: £107.4m) at the end of the half year, including advance payments from Jet2.com and Jet2holidays customers of circa £98m (2011: £63m).

Earnings per share increased to 30.11p from 21.82p. The Board has decided to pay an increased interim dividend of 0.54p per share (2011: 0.43p), in recognition of improved profit performance. The dividend will be paid on 1 February 2013 to shareholders on the register at 28 December 2012.

Leisure Airline

Jet2.com flew 3.6m scheduled passengers (2011: 3.2m) in the period, an increase of 14%, with the total number of routes served from all bases rising to 162 (2011: 148). Seat capacity increased by 11% compared to the previous summer. Load factors increased from 89.8% to 91.6%, and net ticket yields increased from £52.63 to £59.81. In total, revenues rose by 23% to £388m, as a result of both increased passenger volumes and revenue per passenger. The growth of Jet2holidays accounted for over two thirds of the increase in Jet2.com passenger volumes and its growth was the principal driver of the airline's increased load factors and yields. Jet2.com's profit margins were slightly ahead of the previous half year despite operating cost increases of 20%, which were driven by higher fuel, maintenance and sub-charter costs, in addition to our increased flying.

Retail sales per passenger increased 10% to £30.77 during the half year (2011: £27.87) through a continued focus on pre-departure, in-flight and ancillary product sales.

During Summer 2012 the company operated 44 aircraft (2011: 40) focusing on its core high volume leisure destinations from our eight Northern UK bases - Belfast, Blackpool, East Midlands, Edinburgh, Glasgow, Leeds Bradford, Manchester and Newcastle airports. Two purchased and two leased aircraft were added to the fleet for Summer operation.

For Winter 2012/13, Jet2.com has increased capacity by 7%, with growth provided by additional services to the Canary Islands. Our ski services are enhanced by the addition of Grenoble as a new destination.

Looking forward to Summer 2013, we plan to grow capacity by a further 11% (Summer 2012: 11%) with additional services from each of our bases to add frequencies and to support the growth of Jet2holidays.

Jet2.com has a vibrant passenger charter operation providing whole aircraft charter flights for many different customers including other tour operators, the UK government and in support of promotional, sporting and other events. We also fly 18 nightly services for the Royal Mail ensuring that the first class post arrives on time. In total, charter revenues were up 4% in the first half of the year and forward passenger charter bookings for the key Winter period are encouraging. As indicated in our full year results announcement in June 2012, our last flight under the present Royal Mail contract is in October 2014. This contract is being retendered during this financial year, with the result expected in the first quarter of 2013.

The recent ruling by the European Court of Justice in relation to EU 261, which upholds the creation in certain circumstances of a passenger right to compensation for delay, in addition to denied boarding and flight cancellations, has created potential additional compensation costs for the aviation sector, in many cases well beyond the actual fare value. Over the coming months we will establish a clearer picture on the implications for Jet2.com of this decision.

Package Holidays

Jet2holidays, our ATOL protected tour operator, carried 312,000 customers on package holidays in the half year to 30 September 2012 (2011: 158,000). Revenue increased by 117% to £180.6m (2011: £83.3m). This very considerable growth reflects our focused development of package holiday products, improvements to the Jet2holidays.com booking process and our ability to offer package holidays to our existing airline destinations. Our great value all inclusive holidays are ideally suited to the current difficult economic environment. We offer holiday packages encompassing flights, transfers and accommodation ranging from budget self catering to five star luxury hotels, with all inclusive and half board packages being particularly popular. Over 90% of our hotels are contracted directly by the company. We have also recruited more Jet2holidays in-resort representatives who are on hand to ensure that everyone's holiday goes smoothly and to offer assistance to those customers who need a little extra help.

Average holiday prices increased by 10%, reflecting both a shift in mix towards all inclusive and higher grade hotels, and an increase in flight prices, as Jet2holidays pays the website price for substantially all its Jet2.com airline seats. We have also increased Jet2holidays retail sales by adding to the retail products sold through the Jet2holidays booking process, so our customers can start their holiday with an in-flight meal or an extra leg-room seat. We continually develop the Jet2holidays.com website in order to make the online booking process easier, with recent improvements aimed particularly at families. Travel agency distribution is an important part of the overall sales mix, with circa 36% of sales being delivered through this channel via a range of national, regional and local agencies.

For Summer 2013 we are continuing to develop our overall product range. Growth in airline capacity is focussed both on increasing frequencies, at great departure times, to our popular leisure destinations and supporting the growth of Jet2holidays.

Distribution & Logistics

The Group's logistics company, Fowler Welch, provides integrated supply chain solutions for retailers, food manufacturers, growers and importers. Services from distribution centres in Spalding (Lincolnshire), Teynham (Kent), Washington (Tyne & Wear), Heywood (Greater Manchester), Portsmouth (Hampshire) and Newton Abbot (Devon) include both chilled and ambient storage and distribution, together with value adding pick-to-order warehousing operations. Other operations are focussed around imports through our

Dutch hub; container logistics in Alconbury (Cambridgeshire); and other transport solutions for a range of customers.

Overall revenues are up 8% half year on half year, with additional warehousing and distribution business secured in our Spalding and South Coast operations. The ambient business continues to expand at both "the Hub" (our freehold distribution centre at Heywood, Greater Manchester), with revenues increasing by 24% in the first half of the year, and through other dedicated transport solutions for our customers. Our container operations have grown through targeted new business wins and existing customer growth.

Operating margins are better than for the first half year of 2011/12 due to further revenue growth, improved fleet productivity and a number of cost reduction initiatives. In addition, we have improved operational efficiency through the reconfiguration of warehouse space. Further operational efficiencies are also being realised with the introduction of improvements to our vehicle telemetry and scheduling, and driver development. Focus on vehicle acquisition and operation have positively impacted fuel efficiency and operating costs over the past six months. This is expected to continue, along with investment in energy efficient lighting and refrigeration equipment throughout our network.

Fowler Welch's reputation for high quality service gives a real opportunity for further revenue growth in the ambient sector with, particularly, the Hub having scope to capitalise further on its 500,000 sq ft capacity. The sales pipeline at this site in particular remains buoyant.

Our Distribution & Logistics business is currently devoting considerable resource to the development of IT systems and infrastructure. Specifically, phase one of a new Transport Management System will shortly be rolled out, with the anticipated delivery of the system across our entire transport network by Summer 2013.

This will provide the company with greater visibility of resources, volumes and operational data, enabling further focus on customer service and efficiencies.

Whilst the marketplace remains extremely competitive and price focussed, the outlook for Fowler Welch is encouraging. The company's commitment to operational excellence, its national network coverage, and its growing presence in the ambient arena positions it well for future growth.

Outlook

Performance in the first six-month trading period has been positive with strong Jet2.com Summer passenger volumes underpinned by the continued successful growth of Jet2holidays and no doubt assisted by the particularly poor British summer weather. Fowler Welch has traded in line with expectations in a sector that continues to experience tight margins.

As previously noted, our leisure travel operations are becoming increasingly seasonal as we continue to grow the business, and therefore increased winter losses are to be expected. Notwithstanding this, and the current economic climate, the Board expects to exceed current market expectations for the year ending 31

March 2013.

Philip Meeson

Chairman