(DTG.L) Dart Group PLC Buy/Sell

Chairman's Statement

I am pleased to report on the Group's trading for the six months ended 30 September 2009. The Group delivered a profit before tax of £28.1m, a decrease of 23% on last year (2008: £36.3m).

On an underlying basis (excluding the specific IAS39 mark to market adjustments), profit before tax amounted to £25.7m (2008: £33.5m). This trading performance was in line with expectations and reflects the tougher trading environment we are experiencing in the aviation business. Jet2.com, the Group's leisure airline, was successful in maintaining load factors, but in part at the expense of yields. Underlying EBITDA decreased by 23% to £40.0m (2008: £51.6m).

Net cash flow from operations of £12.2m was generated in the period (2008: £20.3m). Total capital expenditure in the first half amounted to £6.5m (2008: £9.5m), primarily relating to the overhaul of the Group's aircraft engines, in addition to a small acquisition by Fowler Welch-Coolchain. Net cash amounted to £16.1m at the end of the period, a £23.3m improvement on the previous year.

The Board has decided to pay an interim dividend of 0.36p per share, in recognition of the Group's trading performance in the period. The dividend will be paid on 29 January 2010 to shareholders on the register at 11 December 2009.

Jet2.com

Jet2.com has continued to focus on its core leisure routes from its bases in the North (Belfast, Blackpool, Edinburgh, Leeds Bradford, Manchester and Newcastle), whilst increasing its services to Eastern Mediterranean destinations. The company operates 31 aircraft of which 29 (21 Boeing 737-300s and 8 Boeing 757-200s) are owned by the Group. The 235 seat Boeing 757-200 enables us to serve popular Eastern Mediterranean, Red Sea and Canary Island destinations very cost effectively whilst still offering competitive economics to traditional Western Mediterranean resorts. It is also an ideal aircraft for our important passenger charter market.

We flew 2.2m scheduled passengers in the six months to 30 September 2009 (2008: 2.3m) with the total number of routes served from all bases rising to 94 (2008: 75). We were able to increase load factors, partly at the expense of yields, by focusing on flying popular routes at departure times convenient to our customers.

Ancillary revenues are continually being developed with gross revenue per passenger increasing to £20.70 during this half year (2008: £15.17). This increase is principally driven by sales made possible by our proprietary reservation system. Pre-ordered meals and advanced seat assignment have been particularly successful on some of our longer routes. Further enhancements continue to be introduced by our commercial and IT teams, including on-going development of our travel trade interfaces which allow easy access to Jet2.com's seat inventory for travel agents and tour operators. Jet2.com was recently honoured at the Northern Ireland Travel and Tourism Awards, winning the award for the Best Travel Internet Booking System.

After a very strong performance in the previous year, our freight and passenger charter business experienced reduced revenues, reflecting a weaker market for charter services. In total, charter revenues were down 18% in the first half. Pleasingly, however, on 29 October 2009 Jet2.com was voted Passenger Airline of the Year by the Baltic Air Charter Association.

Whilst the management of costs has been a particular focus, a significant proportion of the airline's cost base is foreign currency based and has suffered from the weakness of Sterling. Our fuel efficiency programme continues to deliver improved fuel utilisation; two of our Boeing 757 aircraft are now equipped with aero-dynamically efficient winglets with two more aircraft to be fitted this winter. In June 2009, the first Boeing 737 flight took place with Pratt & Whitney manufactured parts fitted to its CFM engines. Jet2.com is the lead customer for this programme, which delivers significant savings relative to the cost of OEM components.

For Winter 09/10, Jet2.com has slightly reduced its overall scheduled capacity, reflecting a prudent approach in the current economic environment. For next summer we will be operating new scheduled services to seven sun destinations from East Midlands Airport (which are also available as package holidays with Jet2holidays.com). We have also expanded our operations from both Newcastle and Manchester Airports and now operate more scheduled leisure routes than any other airline at Manchester Airport. Overall, we have planned a 2% increase in scheduled seat capacity for Summer 2010, with a higher proportion of Eastern Mediterranean destinations. New destinations for next summer include Bergerac, Gran Canaria, Kos, Madeira, Reus and Tunisia, and we have increased capacity to Egypt, Greece and Turkey.

We continue to invest in the development of Jet2holidays.com, our ATOL protected tour operator, which delivered over 47,000 package holidays in the half year to September 2009, an 80% increase over the same period last year. It is expected that Jet2holidays.com will make an increasingly significant contribution to the airline's passenger numbers in the coming year. We believe that it will become increasingly successful through offering our leisure customers good value package holidays from their local airports, flying with Jet2.com.

Fowler Welch-Coolchain

The Group's logistics company, Fowler Welch-Coolchain, provides an integrated supply chain solution for retailers, food manufacturers, growers and importers. Services provided from its distribution centres in Spalding (Lincs), Teynham (Kent), Washington (Tyne & Wear), Stockport (Cheshire) and Portsmouth (Hampshire) include both chilled and ambient storage and distribution, together with value adding pick-to-order warehousing operations. The company also has port operations in Sheerness and Southampton and provides transport services for imported container traffic entering the UK through the East Coast Port network.

There have been significant new business wins during the period and further additional business wins from existing customers. Our Washington distribution centre has seen increased Tesco Express deliveries, whilst our ambient consolidation centre at Stockport has increased its volumes into Asda stores, including the commencement of Asda George distribution. Like-for-like sales have increased by 8% year on year although fuel surcharges levied have reduced as a result of lower oil prices.

Operating margins have improved during the first six months of the year across the business. Our own vehicle performance has benefited from a combination of increased utilisation, more loaded miles and better networking of the combined fleet, in part driven by a reduction in the ambient fleet. We have continued to invest in driver training and have committed to introduce more 'best in class' fuel efficient vehicles as part of our continuing fleet replacement programme. This, together with a further expansion of our double-decker trailer fleet, will not only generate fuel savings and additional operating efficiencies, but also further reduce our carbon footprint. The Manhattan warehouse management system implemented at Spalding is also now generating substantial operating efficiencies and will be rolled out through all other chilled distribution centres during the remainder of the financial year.

We continue to develop our container transport operations, which not only enhances our ability to provide an end-to-end service to customers but also reduces traditional periods of vehicle downtime in our chilled network. The company increased its presence in this sector through the acquisition on 1 September 2009 of Bawdsey Haulage Limited, a company specialising in the distribution of containers from its depot at the Port of Felixstowe. This operation is expected to generate revenues of approximately £6m per annum. In addition to this acquisition, an operation has commenced at Teesport to further develop the container business.

Fowler Welch-Coolchain continues to exploit considerable growth opportunities across all its core activities and is in a good position to capitalise on further market consolidation.

Outlook

On an underlying basis, we expect full year trading to be in line with market expectations. Jet2.com forward booking levels are encouraging and Fowler Welch-Coolchain continues to perform strongly. However, we expect the current challenging trading environment to remain for some time and we will continue to manage the business prudently, whilst continuing to take advantage of market opportunities.

Philip Meeson,

Chairman 19 November 2009

www.dartgroup.co.uk

Enquiries:
Philip Meeson, Chairman Mobile: 07785 258666
Andrew Merrick, Group Finance Director Mobile: 07788 565358
Andy Pedrette, Smith & Williamson Corporate Finance 020 7131 4000

Limited

Consolidated Group Income Statement (unaudited)

For the half year ended 30 September 2009
Half year ended 30 September 2009 Half year ended 30 September 2008 Year ended 31 March 2009 - Audited
Before Specific IAS Before Specific IAS Before Specific IAS
39 mark to market Specific IAS 39 mark 39 mark to market Specific IAS 39 mark 39 mark to market Specific IAS 39 mark
adjustments to market adjustments to market adjustments to market
adjustments IFRS adjustments IFRS adjustments IFRS
Note £m £m £m £m £m £m £m £m £m
Turnover 3 272.7 - 272.7 272.8 - 272.8 439.3 - 439.3
Net operating expenses (247.4) 2.4 (245.0) (237.9) 2.8 (235.1) (405.3) 4.7 (400.6)
Other operating income - - - 1.0 - 1.0 1.2 - 1.2
Operating profit 25.3 2.4 27.7 35.9 2.8 38.7 35.2 4.7 39.9
Finance income 2.2 - 2.2 2.4 - 2.4 0.9 - 0.9
Finance costs (1.8) - (1.8) (4.8) - (4.8) (7.3) - (7.3)
Net financing costs 0.4 - 0.4 (2.4) - (2.4) (6.4) - (6.4)
Profit on ordinary activities before 25.7 2.4 28.1 33.5 2.8 36.3 28.8 4.7 33.5

taxation

Taxation 6 (7.2) (0.7) (7.9) (10.3) (0.8) (11.1) (5.1) (1.3) (6.4)
Profit for the period (all 18.5 1.7 20.2 23.2 2.0 25.2 23.7 3.4 27.1

attributable to equity shareholders of the parent)

Earnings per share - total 4

Earnings per share - continuing operations

Consolidated Group Statement of Comprehensive Income (unaudited)

For the half year ended 30 September 2009

Half year ended 30 Half year ended 30 Year ended 31 March
September September 2009
2009 2008 Audited

£m £m £m

Profit for the period 20.2 25.2 27.1

Exchange differences on - (0.1) (0.2)

translating foreign operations
Effective portion of changes (0.5) (1.9) (11.8)

in fair value of cash flow hedges
Taxation on components of 0.1 0.5 3.7

other comprehensive income
Other comprehensive income & (0.4) (1.5) (8.3)

expense for the period, net of taxation
Total comprehensive income for 19.8 23.7 18.8

the period all attributable to owners of the parent

Consolidated Group Balance Sheet (unaudited)

As at 30 September 2009
30 September 2009 30 September 31 March 2009
2008 Audited

£m
£m £m

Non-current assets
Goodwill 7.0 6.8 6.8
Property, plant and equipment 183.4 186.3 190.5
Derivative financial 5.0 6.0 2.4

instruments
195.4 199.1 199.7

Current assets
Inventories 1.0 0.3 0.4
Trade and other receivables 45.4 47.9 45.1
Derivative financial 6.3 6.6 32.7

instruments
Cash and cash equivalents 16.5 0.4 11.8
69.2 55.2 90.0

Total assets 264.6 254.3 289.7

Current liabilities
Trade and other payables 114.5 118.6 139.9
Borrowings 0.4 7.6 -
Derivative financial 2.0 2.1 30.8

instruments
116.9 128.3 170.7

Non-current liabilities
Other non current liabilities 6.1 6.2 6.4
Derivative financial 7.3 4.1 0.2

instruments
Deferred tax 20.9 17.5 19.0
34.3 27.8 25.6

Total liabilities 151.2 156.1 196.3

Net assets 113.4 98.2 93.4

Capital and reserves
Called up share capital 1.8 1.8 1.8
Share premium account 9.3 9.3 9.3
Cash flow hedging reserve 1.5 8.6 1.9
Profit and loss account 100.8 78.4 80.4

Other reserves - 0.1 -
Total shareholders' equity 113.4 98.2 93.4

Consolidated Group Cash Flow Statement (unaudited)

For the half year ended 30 September 2009
Half year ended 30 September Year ended 31 March

Audited
£m
£m £m

Cash flows from operating activities
Profit before taxation from continuing operations 28.1 36.3 33.5

Adjustments for:
Finance income (2.2) (2.4) (0.9)
Finance costs 1.8 4.8 7.3
Depreciation 14.7 16.6 30.7
Financial derivative close out 7.4 - -

costs
Equity settled share based - 0.1 0.2

payments
Fair value adjustments (2.4) (2.6) (4.7)
Operating cash flows before 47.4 52.8 66.1

movements in working capital
(Increase) in inventories (0.6) - (0.1)
Decrease / (increase) in trade and other receivables 0.6 2.3 (5.3)
(Decrease) / increase in trade and other payables (33.4) (33.9) 7.3
Financial derivative close out costs - - (6.5)

Cash generated from operations 14.0 21.2 61.5

Interest received - 1.0 0.1
Interest paid (1.8) (2.3) (2.8)
Tax received / (paid) - 0.4 (0.4)

Net cash generated from operating activities 12.2 20.3 58.4

Cash flows from investing activities
Proceeds from sale of property, plant and equipment - - 0.1
Business acquisition (0.7) - -
Purchase of property, plant (5.8) (9.5) (27.9)

and equipment
Net cash used in investing (6.5) (9.5) (27.8)

activities Cash flows from financing activities
Net repayments of proceeds from borrowings - (22.0) (22.0)
Interim dividend paid (1.0) - -
Transaction costs paid - - (0.9)

Net cash used in financing activities (1.0) (22.0) (22.9)

Effects of exchange rate - - 0.1

changes
Net increase / (decrease) in cash and cash 4.7 (11.2) 7.8

equivalents
Cash and cash equivalents at beginning of period 11.8 4.0 4.0

Cash and cash equivalents at 16.5 (7.2) 11.8

end of period

Consolidated Group Statement of Changes in Equity (unaudited)

For the half year ended 30 September 2009
Share Share Cash Flow Hedging Retained Earnings Other Total Reserves
Capital Premium Reserve Reserves
£m £m £m £m £m £m
Balance at 1 April 2008 1.8 9.3 10.0 53.1 0.2 74.4
Total comprehensive income for - - (1.4) 25.2 (0.1) 23.7

the period
Share based payments - - - 0.1 - 0.1
Balance at 30 September 2008 1.8 9.3 8.6 78.4 0.1 98.2
Total comprehensive income for - - (6.7) 1.9 (0.1) (4.9)

the period
Share based payments - - - 0.1 - 0.1
Balance at 31 March 2009 1.8 9.3 1.9 80.4 - 93.4
Total comprehensive income for - - (0.4) 20.2 - 19.8

the period
Share based payments - - - 0.2 - 0.2
Balance at 30 September 2009 1.8 9.3 1.5 100.8 - 113.4

Notes to the consolidated financial statements

For the half year ended 30 September 2009 (unaudited)

1. General information

The accounts for Dart Group PLC (the "Group") have been prepared and approved by the Directors in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union ("Adopted IFRS"). The Group's accounts consolidate the accounts of Dart Group PLC and its subsidiaries.

The interim report for the six months ended 30 September 2009 was approved by the Board of Directors on 18 November 2009.

2. Accounting policies

Basis of preparation

The accounts have been prepared under the historical cost convention, except for all derivative financial instruments which have been measured at fair value. In addition this interim financial report does not comply with IAS 34, Interim Financial Reporting, which is not currently required to be applied under AIM rules.

Except as described below the accounting policies, presentation and methods of computation are consistent with those described in the Group's accounts for the year ended 31 March 2009.

The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 April 2009:

The interim financial information for the 6 months ended 30 September 2009 has not been audited or reviewed by the auditors. The comparative figures for the financial year ended 31 March 2009 are not the Group's statutory accounts for that financial year. Those accounts, which were prepared under IFRS, have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 237(2) or (3) of the Companies Act 1985.

The Group's accounts are presented in pounds sterling and all values are rounded to the nearest £100,000 except where indicated otherwise.

3. Segmental information

For management purposes the Group is divided into two main segments, Aviation Services and Distribution. These divisions are the basis on which the Group reports its primary segmental information in the day-to-day management of the business. The following is an analysis of the Group's revenue by operating segment. All of the segmental revenue reported is from external customers.
Segmental Revenues Half year to Half year to Year to
30 September 2009 30 September 2008 31 March

Audited

£m £m £m

Aviation services 215.4 215.6 326.4
Distribution 57.3 57.2 112.9
272.7 272.8 439.3

4. Earnings per share

The calculation of earnings per share is based on the following:
Half year to Half year to Year to
30 September 30 September 31 March
2009 2008 2009 Audited

Profit for the period (£m) 20.2 25.2 27.2

Weighted average number of 141,089,854 141,065,694 141,065,694

ordinary shares in issue during the period used to calculate basic earnings per share
Weighted average number of 145,906,222 141,065,694 144,590,658

ordinary shares in issue during the period used to calculate diluted earnings per share

5. Dividends

An interim dividend has been proposed during the six month period to 30 September 2009 of 0.36p per share (2008: nil).

6. Taxation

The tax charge for the period of £7.9 million is calculated by applying an estimated effective tax rate of 28% for the year to 31 March 2010 to the profit for the period (2008: 30.6%).

7. Reconciliation of net cash flow to movement in net cash / (debt)
Half year to Half year to Year to
30 September 30 September 31 March

Audited
£m
£m £m

Increase / (decrease) in cash 4.7 (11.2) 7.9

in the period
Movement in net debt in the (0.4) 22.0 21.2

period
Change in net debt resulting 4.3 10.8 29.1

from cash flows in the period
Other non cash changes - (0.8) (0.1)
Net cash / (debt) at beginning 11.8 (17.2) (17.2)

of period
Net cash / (debt) at end of 16.1 (7.2) 11.8

period

8. Contingent liabilities

The Group is in litigation in the US against Sutra Inc and Novak Niketic, who provided use of the reservation system operated by Jet2.com until February 2008, in relation to the termination of the use of this system. An unspecified counterclaim has been lodged which is being vigorously defended by the Group in respect of which the Directors estimate approximately $2.5m liability in the unlikely event that the counterclaim is successful.

9. Other matters

This report will be posted on the Company's website, www.dartgroup.co.uk and copies are available from the Company Secretary at the registered office of the Company, Low Fare Finder House, Leeds Bradford International Airport, Leeds LS19 7TU.

This information is provided by RNS The company news service from the London Stock Exchange

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