Shares in Jet2.com owner Dart Group (DTG) have soared 35.5% to £10.08 after revealing pre-tax profit for the year to 31 March 2019 will 'substantially exceed' market expectations.
This is impressive considering average ticket prices per passenger fell 15% to £73.65.
Canaccord Genuity analyst Gert Zonneveld has increased his earnings per share forecast by over 50% to 97.5p in the current financial year.
‘Our earnings forecasts continue to reflect an element of cautiousness relating to medium-term uncertainties, including fuel prices, dollar and euro cost headwinds, expansion-related costs and pricing competition,’ comments Zonneveld.
Operating profit has jumped 27% to £130.6m over the same period, driven by a 38% rise in sales to £2.39bn as more people jetted off on holiday.
Load factor, an important measure of how effectively planes are filled with passengers, is up from 91.5% to 92.2%.
Dart says demand for its leisure travel product has strengthened since March and it plans to grow its flight-only and package holiday offering.
On the back of the strong results, the dividend has been hiked 42% to 7.5p.
While trading is robust, investors should note a hint of caution in Dart’s outlook as it is unclear how demand will develop, citing emerging cost pressures and an uncertain UK economic outlook as Brexit approaches.
One of the risks is subdued consumer spending, which is already affecting other companies, particularly in the retail sector.
