Owner of Jet2 holiday brand, Dart Group PLC (LON:DTG) raised its full year profit expectations on the back of continued growth in its leisure travel business and reduced levels of discounting in the market.
In a brief trading update, the company said it now expects underlying profit before tax for the year to the end of March 2018 to be “materially ahead” of market forecasts.
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Tough competition in the travel sector had led to heavy discounting by businesses but Dart said it has seen a more normalised pricing environment over the past year.
Shares jumped 13.5% to 737.50p in morning trading.
Forward bookings for summer 2018 in the leisure travel division, which includes the Jet2 airline and Jet2 package holiday operator, are “presently satisfactory”, the group added.
“We also remain encouraged by the performance of our two new operating bases at London Stansted and Birmingham airports,” it said.
However, the company warned that it was still early in the leisure travel booking cycle and remains cautious on pricing.
READ: Dart Group expects full year profit to beat current market forecasts
Nevertheless, the firm expects its trading performance for the 2019 fiscal year to be broadly in line with the current financial year due to “satisfactory” forward bookings and the execution of its growth strategy.
As for the distribution and logistics business, Fowler Welch, Dart said it continues to focus on growing its revenue pipeline and developing existing and new business opportunities.