- Progress made with growth strategy
- Full year pre-tax profit up 43%
- Over the past year shares have gained 16%
Shares in Jet2 (JET2:AIM) were up over 1% in morning trading at £13.08 as the airline and package holidays provider reported a 43% jump in pre-tax profit to £529.5 million for the year ending 31 March 2024.
Total revenue was up 24% to £6.25 billion compared to £5.03 billion last year.
The airline and package holidays provider attributed the gain to the popularity of their holiday products which saw total flown passengers increase 9% to 17.72 million compared to 16.22 million last year.
Higher margin per passenger package holiday customers rose 15% to 6.08 million, representing over two thirds of total flown passengers.
The company said that their new Liverpool airport base was proving successful and operations from its 12th UK base at Bournemouth airport will start from February 2025.
WORD OF CAUTION
It is not all turbulent free for Jet2, however.
The company said passengers are booking much closer to departure ‘therefore pricing for our flight-only and package holiday products must remain attractive.’
Summer on sale seat capacity is currently 12.3% higher than last summer at 17.26 million seats.
Jet2 is also mindful of the current macro-economic and geopolitical environments which might influence future consumer spending patterns.
EXPERT VIEW
Russ Mould investment director at AJ Bell said: ‘When the weather is as poor as it has been in the UK, it’s no wonder the public have been eager to fly to brighter climates. Jet2’s results tick a lot of the right boxes – revenue, profit and dividends are all up and it flew a record number of passengers. Consumers continue to do everything they can to have a week or two away on holiday, even if that means cutbacks elsewhere.
‘That’s the good news, now the bad. Travel demand is solid, but consumers remain reluctant to book too far ahead. Last-minute bookings typically mean airlines have to fight on price to fill their planes or holiday packages. Jet2 has managed to push up its summer 2024 prices, but they don’t fully offset cost increases.’
Canaccord analysts are upbeat about the airline and package holidays provider saying in a research note that the company is a ‘quality offer,’ but their shares are ‘yet to be fully appreciated.’
‘Jet2’s long-term strategy is to be the UK’s leading and best travel business with ‘people, service, profits’ serving as a guiding principle.
‘In hospitality, we believe that the morale of the front line can heavily impact the bottom line, we think content customers and happy colleagues bode well for future prospects and for shareholders as we think this underpins long-term profit sustainability.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Martin Gamble) own shares in AJ Bell.
