Jet2 hikes dividend as profits rise amid record passenger numbers

(Sharecast News) - Jet2 posted a jump in full-year profit on Thursday and lifted its dividend as it hailed record passenger numbers. In preliminary results for year to the end of March 2024, the leisure travel group said operating profit rose 9% to £428.2m, while pre-tax profit was up 43% at £529.5m and revenue grew 24% to £6.3bn.

Jet2 declared a final dividend per share of 10.7p, up from 8p a year earlier.

The company flew a total of 17.72m passengers, up 9% on 2023, with higher margin per passenger package holiday customers up 15% to 6.08m, representing 68.3% of total flown passengers, up from 65.9% a year earlier.

Jet2 said that although customer bookings were closer to departure, it achieved a "healthy" average load factor of 89.8%, down a touch from 90.5% in 2023, with growth in average pricing for both leisure travel products "robust". The load factor gauges how full the planes are.

Chief executive Stephen Heapy said: "These results underlined the popularity, resilience and flexibility of our holiday products and also our leading brand position, as despite the continuing inflationary pressures, millions of UK customers still chose to prioritise their disposable income for a rejuvenating and relaxing Jet2 holiday!"

Jet2 said that year to date, trading is in line with management's expectations.

"Given the late booking profile and the peak summer months of July, August and September not yet complete, plus the majority of Winter 2024/2025 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 2025," it said.

At 1120 BST, the shares were up 4.3% at 1,341p.

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.

"As ever, it falls on the Bank of England to start cutting interest rates before consumers are going to feel more confident with their finances and spending patterns evolve.

"Jet2 is doing all it can in the meantime, namely focusing on good customer service levels, investing in more aircraft, expanding its airport network and building more capacity to maintain its fleet."