Jet2 profits hit £500m as airline recovery takes off

SHARES in Jet2 swung back into profit as the tour operator cheered a strong recovery of its package holidays.

Jet2, which was formerly known as Dart Group, made profits of £505m in the six months to September, compared with a £195.1m loss a year earlier.

The profits came despite the low-cost airline dishing out more than £50m to compensate customers for summer travel disruption in UK airports. Its revenue also jumped 730pc to £3.56bn in the period while passenger numbers were up by 632pc to 11.2m.

Unlike other airlines, the business has been well prepared for the surge in bookings with more than 8,000 staff retained throughout the pandemic.

And with a steady stream of winter bookings already in the pipeline, profit for the year is set to beat market expectations.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: ‘Jet2’s swing from losses to profits can only be described as impressive, and reflects enormous increases in revenue as the industry recovers from tough lockdown restrictions.’ Jet2 rose 2.9pc, or 26p, to 917.8p.

There was also a boost for the wider airline and travel sector.

British Airways owner IAG was up 1.6pc, or 2.12p, to 134.4p while budget airlines Wizz Air added 2.5pc, or 53p, to 2175p and Easyjet gained 1.9pc, or 7.5p, to 394.1p.

Travel giant Tui rose 4.6pc, or 6.5p, to 147.5p and On The Beach, the package holiday group, inched up 7pc, or 7.2p, to 110p.

The FTSE 100 was up just 1.36 points, to 7466.6 and the FTSE 250 added 0.2pc, or 39.84 points, to 19,540.34. Mining stocks also held firm despite China’s Covid infections reaching fresh highs, with Anglo American inching up 1.2pc, or 37.5p, to 3228.5p, Antofagasta adding 0.9pc, or 11.5p, to 1360.5p and Glencore rising 1.1pc, or 5.7p, to 536p.

Testing, certification and inspection company Intertek was another riser after its revenue rose 5.6pc to £1.08bn from July to October. It said lockdown restrictions in China had a significant impact on its business between March and June.

But it has been operating as normal in the country since July and business has rebounded quickly. It rose 4.6pc, or 176p, to 4036p. The landlord which provides housing for homeless people recovered only a day after a row broke out over its financial stability. Home Reit said a report pub lished by the US short-seller Viceroy Research was ‘inaccurate and misleading’ concerning questions over its business model and ability to collect rent.

Shares, which plunged nearly 20pc on Wednesday, rose 4.5pc, or 2.8p, to 65p. There was some respite for the wider property sector, with warehouse giant Segro gaining 2.6pc, or 21.2p, to close at

837.2p and Hammerson, the owner of the Birmingham Bullring shopping centre, adding 4.6pc, or 1.11p, to 25.42p.

At the same time, storage unit provider Safestore cheered a rise in revenue and the opening of eight sites across Europe.

Revenue increased by 5.5pc to £53.5m between August and October. The shares rose 1.5pc, or 13.5p, to 937.5p. Elsewhere, small cap used car dealer Motorpoint fell 1.3pc, or 2p, to 156p after warning its focus on investing in technology, development and marketing would eat into profits.

The group invested £3.5m in the business for the six months to September. This helped lift its market share to 3.7pc, compared with 2.9pc a year earlier.

That generated record first-half revenues of £786.7m but also hit the company’s profits, which plunged 77.8pc to £3m.