- Record 2024 revenue and profit
- Limited forward visibility
- Trading in line with expectations
Leisure travel company Jet2 (JET2:AIM) suffered some minor turbulence on Wednesday (9 July) after the shares dropped 7% despite the airline reporting record full-year revenue and profitability.
Giving credence to the stock market adage that it is often better to travel than arrive, the shares have had a good run coming into results rising around 15% year-to-date and 34% over the last 12-months.
WHY DID THE SHARES FALL?
The company noted the continuing trend for summer bookings to be made closer to departure, which limits forward visibility, and may increase uncertainty given the 8% increase in on-sale seat capacity.
Nevertheless, Jet2 insisted that customers’ ‘eagerness’ to get away and relax remains strong, ‘provided price remains attractive.’
Julie Palmer, partner at Begbies Traynor commented: ‘The continued trend towards later bookings, combined with ongoing geopolitical risks and a fragile economic backdrop, could weigh on consumer sentiment over the crucial summer months.
‘With that in mind and the bulk of peak season trading still to come, there’s little room for complacency.’
Investment analyst Daniel Coatsworth at AJ Bell said: ‘Jet2 may have announced a robust set of full-year results and unveiled a meaningful hike in its dividend but, in signaling some headwinds for the remainder of this year, it has prompted some turbulence in the share price.’
RECORD YEAR
The airline flew a record 19.77 million passengers in the year to 31 March, generating a 15% increase in revenue to £7.17 billion, while pre-tax profit was 12% higher at £593 million.
The board recommended a 13% increase in the total dividend to 16.5p per share and the company has completed 35% of its previously announced £250 million share buyback programme.
Looking ahead, Jet2 said it was on track to meet the company-compiled consensus for pre-tax profit before foreign exchange revaluation of £579 million, slightly ahead of the £577.7 million delivered in 2025.
Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author (Martin Gamble) and editor (Ian Conway) of the article own shares in AJ Bell.
