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Investing.com -- Jet2 (LON:JET2) plc shares fell over 7% on Wednesday after the company posted record results for the year ended March 31, with rising costs and lower margins weighing on market reaction.
Revenue rose 15% to £7.17 billion from £6.26 billion a year earlier. Profit before taxation increased 12% to £593.2 million, while profit before foreign exchange revaluation and taxation rose 11% to £577.7 million.
Operating profit increased 4% to £446.5 million, but the operating margin declined to 6.2% from 6.8%. Profit per passenger fell to £20 from £22.
The company cited inflation, fleet expansion, and new base openings as key contributors to rising costs.
Jet2 declared a final dividend of 12.1p per share, bringing the full-year dividend to 16.5p, up 12% from 14.7p. In April, the company began a £250 million share buyback program, now more than 35% complete.
Seat capacity increased 13% to 22.29 million, with an average load factor of 88.7%, slightly down from 89.8% the previous year.
Flight-only passenger volumes increased 18% to 6.62 million. Package holiday customers accounted for 66.5% of all passengers, down from 68.3% in 2024.
The average price of a package holiday rose 5% to £873. Flight-only ticket yield fell to £119.70 from £121.26.
Non-ticket revenue per passenger rose 6% to £25.56, driven by in-flight retail and baggage income.
Total (EPA:TTEF) operating expenses increased 16% to £6.73 billion. Hotel accommodation costs rose 21% to £2.97 billion, while staff costs climbed 13% to £841.8 million, including a 5.5% pay increase.
Fuel expenses rose 6% to £739 million, and maintenance costs were up 16% to £175.8 million. Carbon costs rose 9% to £115.9 million, affected by regulatory changes and increased flying activity.
Jet2 opened new bases at Bournemouth and London Luton, increasing its UK airport footprint to 13. It also launched services to Morocco and Jerez and expanded its city breaks offering to include Tallinn, Geneva and Salzburg from winter 2025/26.
Year-end cash and money market deposits totaled £3.16 billion. Net cash increased 17% to £2.02 billion. ‘Own Cash,’ excluding customer deposits, stood at £1.10 billion, down from £1.33 billion.
The company repurchased £398.8 million in convertible bonds and bought 11.3 million shares for £158.5 million.
Capital expenditure reached £398.6 million, mainly for aircraft purchases and infrastructure. Jet2 plans to operate 135 aircraft in summer 2025 and has 132 more on order through 2035.
Summer 2025 seat capacity is 8% higher year over year. Bookings remain close to departure dates, and the company said it is trading in line with expectations.
It declined to provide guidance for the year ending March 2026, citing incomplete summer and winter trading.