It is not often investors get an unexpected treat, but Jet2 PLC (AIM:JET2) handed one out with its latest trading update.
Alongside steady guidance for the year ahead, the leisure airline and package holiday group unveiled plans for a £250 million share buyback, a move Peel Hunt called "very positive" given the company's robust balance sheet.
Giving money back this way can improve headline financial metrics and is usually more tax-efficient than dividends, especially for institutional investors.
Private investors, on the other hand, might prefer dividends. Unlike a buyback, a dividend puts cash directly in your pocket. That income can be particularly valuable if you are relying on your investments to fund your lifestyle or if you are investing through a tax-free wrapper like an ISA.
In short, buybacks reward shareholders indirectly, dividends do it directly.
Anyway, back to the numbers. Jet2 said trading for the year to the end of March 2025 was in line with expectations.
It slightly nudged up the lower end of its profit guidance range, now expecting pre-tax profits before foreign exchange and asset disposals to land between £565 million and £570 million.
That compares with Peel Hunt's forecast of £567.6 million. Disposals of older aircraft brought in £10 million of profit, ahead of the £3 million Peel Hunt had pencilled in.
Cash remains strong. Jet2 ended the financial year with £3.2 billion of total cash and £1.1 billion of own cash, which is cash available after setting aside customer deposits. The company also completed the early repayment of a £387.4 million convertible bond, removing any risk of future shareholder dilution.
Looking ahead to summer 2025, Jet2 is planning 18.6 million seats, an 8.3% increase on last summer.
That is a touch lower than the 8.5% growth it flagged in February, but is broadly in line with Peel Hunt's forecasts.
Booking trends remain late, something Jet2 had already anticipated, and there is a slight tilt towards flight-only sales over package holidays. Pricing has stayed stable, with modest increases helping to absorb higher input costs like fuel and wages.
Jet2 said it was satisfied with progress so far for the year ending March 2026 but remains cautious about the potential impact of wider geopolitical and economic events.
For now, though, the buyback and a strong cash position have given shareholders a clear reason to cheer.
The shares rose 13.5% to 1,531.75p.