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  • Try to explain by CASTLEFORD TIGER
    Fri, 19 Dec 2014 14:17:00 GMT

    Taken as examples

    – January 2014: The business takes out a hedge for $100 @ $1.60 for a known commitment in Jan 2015, deemed as effective
    – At year end March 2014: as the derivative instrument is held at year end and is deemed to be effective, under IAS 39 it needs to undergo a fair value re-measurement based on the forward rate for the same contract existing at March 2014
    – In this example we will use this fair value forward rate as $1.65 (which we measure by reference to fair values provided by external counterparties)
    – Therefore, on this basis there would be a CREDIT to the Balance Sheet of £1.89 (being the difference between $100 @ $1.60 v $100 @ $1.65) and a corresponding DEBIT to the cash flow hedge reserve of £1.89
    – In year 2014/15, the hedge is used up as planned at $1.60, the committed and known hedge cost of £62.50 ($100 @ $1.60) coming through the P&L account and the balance sheet and cash flow hedge reserve entries detailed above reverse to a nil effect
    – In very simple terms the balance sheet and cashflow reserve initial entries are essentially telling you what you notionally ‘could have won or lost’ if you hadn’t hedged or had waited to hedge all your commitment until the year end
    – Clearly, in our business where we are on sale 9-10 months in advance of a season we require certainty of cost base and therefore need to hedge our risk in a considered and consistent manner in line with our Hedge Policy – this also allows us to set our pricing.
    Waiting until year end to hedge the next years commitment or undertaking a spot buying process is not an option as this amounts to a form of speculation and we could not operate.
    The only way this hedging strategy becomes an issue is if our hedge rates differ considerably from our competitors the wrong way, something we obviously monitor – we do know they hedge in a very similar pattern to ourselves as they report their positions regularly
    You may also note that EZY accounts in 2013 detailed a £97m negative movement in the cash flow hedge reserve for the same reasons

    In terms of the 2014 ‘charge’ to the cashflow hedge reserve of £39.2m detailed in the Annual Report:
    1) There is a reversal of £16.9m of hedges held at March 2013 prior year end that were ‘in the money’ (eg: $ were hedged at $1.58 but marked to market @ $1.52/€ hedged at €1.21 marked to market at €1.18) that were now used up
    2) There is £33.8m relating to the mark to market of new hedges held at year end March 2014 (for financial year 2014/15) (eg: $ hedged at $1.54 marked to market at $1.66) – this will reverse in 2014/15 as the hedges are used up. You may recall that the $ rate was being called to below $1.50 by ‘experts’ in Sept/Oct 2013 but has rallied considerably and this is why the ‘notional charge’ is so big at year end.
    3) There is a deferred tax credit on the above of £11.5m
    By CASTLEFORD TIGER
  • Re: Future by CASTLEFORD TIGER
    Fri, 19 Dec 2014 14:12:00 GMT

    The prices being quoted are averaged out.

    In simple terms we are now 60 usd a barrel against 120/130.
    Of course we have come out negative in FX with the $ but thev huge amount we lost year on the FX etc has now unwound.

    Oil will fall further in the short term before we settle at maybe 80 in the second half of 15.

    Either way its a great position to be in.

    tiger By CASTLEFORD TIGER
  • Re: Future by valuemanbuyer
    Thu, 18 Dec 2014 18:49:00 GMT

    Fuel reduction is 33%,lower as of 5Dec vs a year ago ( in US $). So in sterling it's maybe 25% down so far
    IATA.org By valuemanbuyer
  • Re: Future by valuemanbuyer
    Thu, 18 Dec 2014 18:39:00 GMT

    Thx for response .are you sure the reductions will be so much when you consider the dollar strengthening 10% ?
    I was being ultra conservative because it tends to bite me when I m not - especially in Darts case.
    The CEO of Easyjet said prices take 12-18 months to increase after cost pressures and vice - versa so not much to worry about there .
    By valuemanbuyer
  • Re: Future by CASTLEFORD TIGER
    Thu, 18 Dec 2014 10:33:00 GMT

    You are wrong.

    The savings will be much greater than you suggest. Aviation fuel should be about 45/50% cheaper when the market settles.
    I have a potential saving of over 100 million to the bottom line in FY 2016.

    The shares are certainly looking a strong buy again , just based on oil price reduction.

    There is a chance flights may become cheaper but its doubtful.

    Tiger By CASTLEFORD TIGER
  • Future by valuemanbuyer
    Thu, 18 Dec 2014 09:14:00 GMT

    Wonder whether you agree with this ?
    We know Dart hedge forward for their entire years budget on fuel so no savings to 3/15.
    We know that fuel accounts for 30-40% of an airline revenues (780m 3/16).
    If Dart save 15% of its fuel costs which is probably pessimistic for 3/16 then you could be looking at a saving of £40m + (fuel costs of £300m) which would equate to earnings over 50p and this a share price target of 500-600p.
    Tell me where I'm wrong ? By valuemanbuyer
  • Outlook very good?! by digger61
    Fri, 28 Nov 2014 19:06:00 GMT

    Whilst the oil price drop may take a while to feed through due to the hedges one would expect that all news coming from DTG will be 'exceeded boards expectations'.
    These are cheap on a 12 month view.
    PM has always played a cautious hand and I bet he cannot believe the hand he has now been dealt with the oil price drop. The number one expense. It's drop won't upset his customers to much either, leaving them with more pounds in theri pockets to spend on hols etc. By digger61
  • Re: The main reason results were .... by Pinlord17
    Thu, 20 Nov 2014 13:52:00 GMT

    Tour operators traditionally show a loss in the winter and Jet2.com are no exception however bear in mind that they have had to make a provision this year of £17m in anticipation of passenger compensation in the wake of the EU ruling over delayed flights By Pinlord17
  • Re: The main reason results were .... by CASTLEFORD TIGER
    Thu, 20 Nov 2014 09:50:00 GMT

    So we will make circa 85 million at the half way stage.
    Last forecasts I saw were under 30 million so a pretty hefty loss in the winter.

    I think most of the losses were financial issues that had gone against the co last year.
    I remain a much smaller holder but I still expect the shares to be re valued up to 500p by 2016.

    Tiger

    So I guess we make 33/40 million for the full year.

    tiger

    Looks like that prediction will be very close..cash pile is now net almost 200 million.

    Tiger By CASTLEFORD TIGER
  • Re: some details of fuel by valuemanbuyer
    Tue, 18 Nov 2014 16:42:00 GMT

    Thx Tiger.
    Not sure I can wait that long !! By valuemanbuyer
  • some details of fuel by CASTLEFORD TIGER
    Tue, 18 Nov 2014 16:11:00 GMT

    The Group’s policy is to forward cover future fuel requirements up to
    100% and up to three years in advance. The magnitude of the aviation
    fuel swaps held is given in note 22 to the consolidated financial
    statements. As at 31 March 2014, the Group had hedged substantially
    all of its forecast fuel requirements for the 2014/15 year and a
    proportion of its requirements for the subsequent year, in line with the
    Board’s policy.
    Foreign currency risk
    The Group has significant transactional foreign currency exposure,

    I should add it was Fuel swops going against them that led to some hefty write off`s last year.

    Also see if you can follow this.
    In terms of the 2014 ‘charge’ to the cashflow hedge reserve of £39.2m detailed in the Annual Report:
    There is a reversal of £16.9m of hedges held at March 2013 prior year end that were ‘in the money’ (eg: $ were hedged at $1.58 but marked to market @ $1.52/€ hedged at €1.21 marked to market at €1.18) that were now used up

    There is £33.8m relating to the mark to market of new hedges held at year end March 2014 (for financial year 2014/15) (eg: $ hedged at $1.54 marked to market at $1.66) – this will reverse in 2014/15 as the hedges are used up. You may recall that the $ rate was being called to below $1.50 by ‘experts’ in Sept/Oct 2013 but has rallied considerably and this is why the ‘notional charge’ is so big at year end.

    tIGER
    By CASTLEFORD TIGER
  • Re: The main reason results were .... by CASTLEFORD TIGER
    Tue, 18 Nov 2014 15:55:00 GMT

    Hi

    I have in detail the Hedge details we have in place. Not going to second guess but a fair amount has been bought ( at higher prices).
    Of course we are buying now for summer 16 at much lower prices.

    I will try and find it to post.
    There are a fair few details in the Report as well.

    tiger By CASTLEFORD TIGER
  • Re: The main reason results were .... by valuemanbuyer
    Tue, 18 Nov 2014 08:58:00 GMT

    Tiger
    I've been looking at the potential fuel savings for the airline. The Airline site suggests fuel is down 13% on last year in $. Since we spend 50% of costs on fuel don't you think that the savings could be huge in 2015 ?
    I'm thinking £30m+ savings. It was also interesting to see that an analyst thought Thomas Cook would save 10% of their entire costs on airline fuel savings . If that's similar for our holiday business then margins would be at least doubling . Just wondered what you think the savings might be in a full year ? By valuemanbuyer
  • Court Ruling by Our Haven
    Mon, 03 Nov 2014 12:34:00 GMT

    This is very bad news. Should drop today By Our Haven
  • Re: good entry point by CASTLEFORD TIGER
    Fri, 31 Oct 2014 13:33:00 GMT

    note my post on that day! By CASTLEFORD TIGER
  • forward contracts?? by cm45
    Wed, 10 Dec 2014 14:12:28 GMT

    Recently sold all my DTG to bank profits and have not seen them named alongside Easyjet as beneficiaries of the oil price crash. Cant see any mention of whether DTG have bought oil forward but if not they should surely benefit hugely from cheap oil. Anyone know anything about this?
  • daily mail today by mikeep
    Thu, 27 Nov 2014 09:11:57 GMT

    I see the DM are doing their best to screw all the airlines with this over priced ruling. Compensation culture on this scale will be the death of cheap flights. And we can go back to the '80s and expensive shorthaul.... "Has your flight been delayed in the past six years? Here's how to claim compensation ... which could be as much as £480"
  • Tipped by Paul Scott by Libero
    Thu, 20 Nov 2014 14:09:36 GMT

    and is reminding me of GTC right now - a good company whose profit warning was more of a blip that has opened up a potential buying opportunity.
  • Positive by mikeep
    Wed, 29 Oct 2014 15:17:53 GMT

    Very positive again today on decent volume again. Anything brewing?
  • RE: UPDATE by wearydoc
    Mon, 27 Oct 2014 16:10:51 GMT

    Yep, well happy with share performance. Has decisively broken above 10 and 30 wk moving averages, with potential valuation of £4.53 using DCF method and £3.52 using Graham formula. 2/3 brokers = strong buy (the other is a hold) and the Blackpool airport closure seems to have gone past without any hiccups, might even produce some economies for the company. Very happy with my holding and the latest update. :)
  • UPDATE by mikeep
    Fri, 24 Oct 2014 06:39:25 GMT

    Excellent update. As usual DTG never over do it. No mention of reduction in fuel costs which must help all parts of the business. Hopefully no exchange cover ups like last year and these have all been flushed out. What is the profit figure expected to be exceded ?
  • Blackpool airport by Tomohawk
    Tue, 30 Sep 2014 07:29:58 GMT

    Blackpool airport is to close on 15th October if a buyer cannot be found. Jet2 operated to 11 destinations and whenever I used it the planes were pretty full. Also the fares from here were higher compared to say Manchester playing on the convenience and handiness of Blackpool and the fact it's £90 return in a taxi to Manchester. With this airport gone customers loyalty to Jet2 will vanish.
  • Encouraging news by wearydoc
    Sun, 28 Sep 2014 18:18:37 GMT

    Some news from TTG Digital about Dart S Heapy, CE. "the tail end of summer is looking slightly more encouraging and winter 2014 is pretty much where we expect to be, and summer 2015 within expectations", “Hopefully we’ve been through the worst and the market will recover.” The same problems have been encountered by other operators, with talk of overcapacity running though the industry. However, this threat subsided as the summer went on - enough for the group chairman, Philip Meeson, to talk of “uplift” in the market in September.
  • big trade by mikeep
    Wed, 16 Jul 2014 11:52:59 GMT

    550k shares for 1.05m today and a slight rise in SP. Good to see a gradual increase since 180p on release of year end results. Still not sure how the hedging/exchange rate issue will affect future profits and am still baffled by the accounts and lack of transparency on this from last year. Hopefully business on all fronts is continuing to grow.
  • One profit warning may/often by jollyspeculator
    Thu, 26 Jun 2014 21:59:23 GMT

    [....]...fill in the cliche "Outlook Taking people on holiday, whether through the sale of a flight or a full holiday package, and the distribution of produce and prepared foods sold by supermarkets, are much-needed, high-potential businesses. Our scale, experience and competitiveness in each sector gives us optimism in our outlook for the long-term growth of the Group. In relation to the current financial year, we are finding demand for leisure travel, this summer, to the markets we serve, less buoyant than we would have hoped for and market pricing weak. This may be due to the weather, the World Cup, or because the financial recovery hasn't yet taken hold in our home territory, the North of the UK. Unfortunately, therefore, in view of the current visibility we have of our remaining summer 2014 forward bookings, we now expect the current year operating profit outturn to be lower than previous market expectations."
  • Tough to value by jollyspeculator
    Thu, 26 Jun 2014 21:57:42 GMT

    cos of all the hedges...so total net assets fell (and comprehensive income was negative) ...the op profit is not gauge of value creation here imv...with plenty going on elsewhere (hedges and leases in particular)
  • RE: better re-entry by jollyspeculator
    Thu, 26 Jun 2014 21:48:04 GMT

    yep..but when??
  • Re:overdone? by corpse
    Thu, 26 Jun 2014 12:53:55 GMT

    Believe you are fan of charts, not done deep research. Chart looked respectable per revenues and economic climate and euro rate seems favourable but RNS not really justify drop, trying to book hols next year aswell and people already booked. So would have thought chart would stay on stream, just a view on light research.
  • Punt by corpse
    Thu, 26 Jun 2014 12:37:34 GMT

    Thought share over sold, so bought a few as numbers stacked up and up 7% profit, better than interest rates. May keep these for a while.
  • Reason for the fall IMO. by 2227
    Thu, 26 Jun 2014 12:35:12 GMT

    Dart did make a headline profit last year but if you dig down the accounts you'll find they actually made a loss of 3.3million pounds. If we look at their CONSOLIDATED GROUP STATEMENT OF COMPREHENSIVE INCOME they seem to have made a loss of 3.3million.Last year they showed a profit of 28million here. Despite the headline profit the SHAREHOLDERS EQUITY in the balance sheet is also down by 5million pounds. DYOR.