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DART GROUP, An Airline That Offers Superb Investor Value. (DTG)     

goldfinger - 23 Apr 2004 13:12


Never been a big fan of airlines and companies especially since 9/11 but bookings are now well up and a recovery as taken place in the industry, in fact more people have decided to go abroad this year than the last few years and the alternative 'stay at home holiday is on the wane' as witnessed by a poor trading statement from Holidaybreak were the camping division as taken a big hit in paticular.
Dart carry out business in both the holiday, short haul and commercial divisions.

The company is very cheap with a P/E of only just over 7 and a forward P/E of just over 6.

It also pays a nice divi, and is a small cap capitalised at around circa of 48 million.

The cheapness as not gone unoticed as you will see from this report.


The smart investors' favourite budget airline

Published:
By Graeme Davies, Companies Correspondent
Email to a friend

A host of shrewd investors are backing budget airline and distribution business Dart Group with one top smaller companies team buying at the start of this month.

Dart (DTG), which operates fledgling budget airline jet2.com and also offers air distribution services using the same planes, has become a tempting destination after a slump in its share price in the second half of last year.


The latest buyers are the smaller companies team at Aberforth who bought 315,000 shares at the beginning of this month to increase the holding of the Aberforth UK Smaller Companies unit trust Aberforth UK Smaller Companies to just under 1.2 million shares.


Dart's share price surged to 224p in the first half of last year before falling back to 124p towards the end of the year. It has been as high as 162p in 2004 but today is unchanged at 132.5p.


At 132.5p the company is valued at just 7.25 times its expected earnings per share of 18p for this year, falling to 6.6 times next year's earnings. It also offers a healthy 4.7% dividend yield which is covered almost three times.


This valuation has attracted the likes of Framlington's AA-rated Roger Whiteoak who holds shares in both the Framlington UK Smaller Companies fund Framlington UK Smaller Companies Acc and Throgmorton investment trust (THRG). New Star's AAA-rated Patrick Evershed also holds 500,000 shares in the Select Opportunities unit trust New Star Select Opportunities and Rathbone's Carl Stick has 250,000 shares in the Rathbone Special Situations unit trust Rathbone Special Situations.


In the first half of the year Dart's pre-tax profits rose by 31% to 7.1 million from a 16% rise in turnover. However this was helped by the seasonal performance of jet2.com which is expected to be profitable in the summer months and loss-making in the winter.


Jet2 operates from Leeds/Bradford and Belfast with flights to 13 destinations once a Belfast-Prague service is launched at the end of this month.


When Dart's fleet of aircraft is not being used to transport holidaymakers they are utilised for distribution services, ferrying cargo, fresh produce and flowers. The company is also involved in freight forwarding at Manchester, Newcastle, east Midlands and London Heathrow.

The company will report its full-year results in June.

Looks a very sound value share to me and I think its a short to medium term investment.

Please DYOR you are responsible for the timing of your buying and selling actions.

cheers GF

goldfinger - 23 Apr 2004 13:14 - 2 of 78

A recovery story waiting to happen.

cchart.php?epic=DTG&height=110&width=245

KEY FIGURES at Previous Day's Close
Market Cap. 45.70 m
Shares In Issue 34.49 m
Prev Close. 132.50 p
PE Ratio 9.25
Dividend Yield 4.61 %
EPS -basic 14.33 p
Dividend PS 6.11 p
Dividend Cover 2.35
Cash Flow PS 97.74 p
Return On Equity (ROE) 13.77 %
Operating Margin 3.74 %
PEG Factor -
EPS Growth Rate -22.16 %
Dividends PS Growth Rate - %
Net Debt 78 m
Gross Gearing 69.60 %
Quick Assets 37.98 m
Net Working Capital -8.06 m
Intangibles / Fixed Assets 10.12 %
Turnover PS 575 p
Pre-Tax Profit PS 21.51 p
Retained Profit PS 8.19 p
Cash PS 20.12 p
Net Cash PS -120 p
Net Tangible Asset Value PS * 83.69 p
Net Asset Value PS 108 p
Spread 5.00(3.70%)

cheers GF.

goldfinger - 25 Apr 2004 12:21 - 3 of 78

The comparative strength of the three Budget airlines, Dart, Eazyjet and Ryanair.

GetGif?config=paritech&cid=1&exchange1=L

Comparative P/Es

DTG = 7.3

EZJ = 35.9

RYA = 100+ (subject to adjustment)

Conclusion, DART is derd cheap.


cheers GF.

Invisage - 25 Apr 2004 15:58 - 4 of 78

VERY CHEAP indeed.

Very bright future too...

Hey Guys,

Just thought id tell you about DART GROUP. - The smart investors' favourite budget airline -

A host of shrewd investors are backing budget airline and distribution business Dart Group with one top smaller companies team buying at the start of this month.

Dart (DTG), which operates fledgling budget airline jet2.com and also offers air distribution services using the same planes, has become a tempting destination after a slump in its share price in the second half of last year.

Heres a few reasons why its a good time to buy now...

* Results in 7 weeks (16th June)
* ISA Stock
* The first half of the year Dart's pre-tax profits rose by 31% to 7.1 million from a 16% rise in turnover
* Company is very cheap with a P/E of only just over 7 and a forward P/E of just over 6
* Offers a healthy 4.7% dividend yield
* Market Cap. 45.70 m
* Shares In Issue 34.49 m
* 3.7% spread
* Directors and Institutions hold 61* of the shares, very few in public hands.
* Loads of cash in Bank
* Jet2 operates from Leeds/Bradford and Belfast with flights to 13 destinations once a Belfast-Prague service is launched at the end of this month.
* 16% (net book value) of the total tangible assets is in freehold property with less than 1% in short term leaseholds
* Airline booking increasing this year, a Very good recovery play considering the stock is on the bottom of its range...

cchart.php?epic=DTG&height=100&width=230

When Dart's fleet of aircraft is not being used to transport holidaymakers they are utilised for distribution services, ferrying cargo, fresh produce and flowers. The company is also involved in freight forwarding at Manchester, Newcastle, east Midlands and London Heathrow.

Cheers
Invisage

Andy - 25 Apr 2004 17:03 - 5 of 78

Just seen a Jet2.com plane parked on the tarmac at Bournemouth airport as I drove past this afternoon

Not sure why, as we aren't on their passenger routeplan, because I just checked, so must have been on freight duties. Lots of Channel Islands fruit, veg and flowers come into Bournemouth airport, and there were several other freight planes there as well, all parked together.

goldfinger - 26 Apr 2004 02:43 - 6 of 78

Andy , why not run a fruit and veg stall down the local market, get the gear dead cheap of the planes and ask Chas and Dave to open it for you on your first trading day, DOWN THE MARKET DURA DURA DURE, DOWN THE MARKET etc.

cheers GF, ps, serves you right for siding with thirdeye.

good luck mate.

goldfinger - 27 Apr 2004 00:11 - 7 of 78

Up a nice 5p, great stuff, rather have a nice steady riser than a 5 day galloper.

cheers GF.

goldfinger - 27 Apr 2004 01:07 - 8 of 78

I hear pro investor Malcolm Stacey is an investor in these and cant beleive just how cheap they are.

cheers GF.

goldfinger - 28 Apr 2004 00:27 - 9 of 78

50K buy at the very end of the day bodes well for wednesday.

cheers GF.

Andy - 28 Apr 2004 20:38 - 10 of 78

goldfinger,

I guess the time of your post gives a clue as to why you posted that rubbish!

I don't "side" with anyone, I call everything as I see it, period!

His question was reasonable, hence my comment.




Scottie - 28 Apr 2004 21:22 - 11 of 78

Posts a lot about a certain share, then various nubile idiots jump on to it and ramp it across any available bulletin board. You can't knock it in some ways I suppose, if you're smart enough to see what is going on you can make some money out of it. Just get out quick before the wheels start coming off. Seen it all before. Croma's the next one on the list. Very clever really, tell everyone how brilliant you are at making money from trading shares, never admit to your failures, and you will suck a lot of punters into following what you trade. Smart guy is GF.

Invisage - 28 Apr 2004 23:06 - 12 of 78

Scottie - wateva.

goldfinger - 29 Apr 2004 00:10 - 13 of 78

Scottie, care to repeat that in a court of law?, If you are suggesting that I am ramping have the truth of your convictions and either present your case to a solicitor, or take it up with the FSA. Ramping is a crimminal offence.

I for one look forward to your reply and when you take up your action, you will then get a counter order from my solicitor.

goldfinger.

ps, everthing printed off dated 28th April 2004, 0.14 am.

goldfinger - 29 Apr 2004 00:16 - 14 of 78

Andy , no offence was meant to be taken up by you, just a little banter that is all.

My deepest appologies if I upset you, that was not my intention and also you will notice I post very late as I post from my business HQ were I run the business during the night.

regards GF.

Andy - 29 Apr 2004 14:19 - 15 of 78

Goldfinger,

Thanks for your reply, and I didn't take any offence!

keepgoing - 25 Aug 2004 09:53 - 16 of 78

This rise is incredible, especially when you consider high oil prices. Anyone know anything - contract wins etc??

goldfinger - 25 Aug 2004 11:54 - 17 of 78

Great aint it. I just identified it as massively undervalued.

cheers GF.

chester1 - 25 Aug 2004 11:58 - 18 of 78

Hi GF. Been looking at this one for a while, keep thinking I've missed 'the flight', especially after moves like this morning. Do you still think its undervalued after such a strong move since may/june ?

goldfinger - 25 Aug 2004 12:15 - 19 of 78

No way of telling chester, just hope so.

cheers GF.

keepgoing - 25 Aug 2004 15:44 - 20 of 78

It's a fantastic rise, I'm just not sure why it's happening now. The PE is still sitting at 11 and they grow revenue and profits every year so if you're not in yet, you're probably not too late.

Hopefully there's also a reason for the rise, Post Office contract or something similar.

legend290782 - 27 Aug 2004 14:03 - 21 of 78

Hi guys, good to see people do well out of this stock. I bought in at 1.29 and sold at 1.50 after divi. I think this company has done remarkably seen as though:

1) Ryannair announced that there was going to be the mother of all price wars between low cost airlines.

2) Easyjets lower than expected results,

3) Oil prices been sky high and

4) The threat of terrorism.

The company owns Jet 2... which operates from Leeds & Bradford airport near me and in April I used them to go to Prague. The seats were full and the air hostess (a right minx might I add)told me that they were putting orders for more planes and looking to develop more routes... it seems to me that their business plan is working.

Well done for staying in guys, just goes to prove that fundamentals can come good in poor markets.

Check out a company called Broker Network Holdings (BNH) Looks very undervalued to me.
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