Dart Group PLC

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Dart Group PLC

Building 470
Bournemouth International Airport
Christchurch, BH23 6SE
United Kingdom
Telephone: 44 (0) 1202 597676
Fax: 44 (0) 1202 593480
Web site: http://www.dartgroup.co.uk

Public Company
Incorporated: 1983 as Channel Express Group Limited
Employees: 1,700
Sales: £268.0 million (EUR 389 million) (2005)
Stock Exchanges: AIM
Ticker Symbol: DTG.L
NAIC: 484110 General Freight Trucking, Local; 481111 Scheduled Passenger Air Transportation; 481112 Scheduled Freight Air Transportation; 481211 Nonscheduled Chartered Passenger Air Transportation; 492110 Couriers; 551112 Offices of Other Holding Companies

Dart Group PLC is the holding company for several subsidiaries providing temperature-controlled distribution and aviation services in the United Kingdom and Europe. The distribution side has been delivering fresh flowers and grocers to U.K. wholesalers since its Channel Island beginnings in the early 1970s. By 1978, the company was operating its own planes and in 2001 began flying passenger flights. In 2003 Dart launched a low cost passenger airline known as Jet2.com.

More than one million passengers a year fly Jet2.com, which has bases in Leeds, Manchester, Belfast, and other cities and flies as far as Hungary and Spain. Dart owns about two dozen jets and also has an aviation parts trading business. The fleet of subsidiary Fowler Welch-Coolchain has about 750 refrigerated trailers, covering a network from the Netherlands to northern England.

ORIGINS

Dart Group PLC traces its origins to two businesses formed in 1971 by Art Carpenter. Carpenter's Air Services contracted space on cargo airlines to ship fresh flowers from the Channel Island of Guernsey, while Carpenter's Transport arranged for their wholesale delivery.

Another produce, flower, and freight shipping business, Express Air Freight (CI), was set up in 1975 with Art Carpenter as director. Express Air Freight began using its own aircraft, a Handley Page Dart Herald, in 1978. The next year, another company, Express Air Services, was formed to take over the aviation operation. In 1980 Express Air Services won its first mail contract, flying between Bournemouth, Bristol, and Liverpool.

In 1983 three new companies with the Channel Express name were formed to take over the Express Air activities. They were taken over by Channel Express Group Ltd., led by Phillip Meeson, a pilot himself and five-time British Aerobatic champion who had previously been successful in automobile retailing and distribution. In the same year, the company was organized into two divisions, Aviation Services and Distribution. Under Meeson, Channel Express invested heavily in new equipment and vehicles.

GOING PUBLIC IN 1988

By 1985, the company had three Dart Heralds in its fleet. Aviation services was growing, with new contracts to deliver parcels and newspapers, while the distribution business was also seeing more volume. The company had 200 employees by 1988, as well as 31 trucks, 46 trailers, and seven Dart Herald planes. The company added a new aircraft type, the Lockheed Electra, in 1989. Three more were added within five years and Dart also worked out a deal with Zantop Airlines of the United States to lease additional Electras as needed.

In 1988, Channel Express Group PLC had an initial public offering on the U.K. Unlisted Securities Market. Shares began trading on the London Stock Exchange in 1991, when the company was renamed Dart Group PLC, after the Rolls Royce-manufactured powerplants in its Dart Heralds. Three years later, these planes began to be replaced by Fokker F27s, which were also powered by Dart engines.

Benair Freight Ltd., a freight forwarding company with offices in the United Kingdom and Far East, was acquired in 1990. It was renamed Benair Freight International Ltd. four years later. Benair developed a specialty in shipping tropical fish and other time-sensitive cargo.

Dart also owned Deltec Aviation Services Ltd., an avionics repair company. It acquired Bourne Aviation Supply Limited, an aircraft parts distributor, in 1992 for about £1 million.

Dart Group had annual revenues of more than £30 million by the early 1990s. The company struggled to maintain its margins in a global economy troubled by military conflict in the Persian Gulf. The Channel Express unit, long identified with the island of Guernsey, was developing into a regional European cargo carrier. It was handling shipments for the likes of UPS and British Airways World Cargo.

Another temperature-controlled distributor, Fowler Welch Ltd., was acquired in 1994. Fowler Welch was based in Spalding, Lincolnshire, and handled horticultural products as well as the region's produce. The existing Channel Express distribution business was merged with Fowler Welch in 1996. Dart was investing millions in capital upgrades at its Fowler Welch facilities, expanding its 90,000-square-foot temperature controlled warehouse in Spalding to 150,000 square feet. By this time, Fowler Welch had about 200 trucks and 300 trailers. It was delivering for several major U.K. supermarkets as well as about 40 wholesale markets.

JETS ACQUIRED 1996

In 1996, the Channel Express Air Services unit began acquiring Airbus A300 airliners for conversion into freighters by BAE Systems Aviation Services, a process which took about four months. The first aircraft was dubbed the "Eurofreighter." By 1998, the company had three of these jets in the fleet.

In 1999 the temperature-controlled distribution business continued to grow with the £14.2 million purchase of the Coolchain Group. Coolchain was based in Teynham, Kent, a fruit-growing area, and had annual revenues approaching £20 million. The Coolchain buy was augmented the next year by the acquisition of A Wood & Son. Fowler Welch and Coolchain were merged into Fowler-Welch Coolchain Ltd. in 2003.

In 1999, a Netherlands subsidiary called Fowler Welch BA was set up to handle international trade, while the Aviation Services division set up a Parts Trading unit. The company also opened a 40,000-square-foot, state-of-the-art distribution center in Portsmouth.

Dart Group had almost 1,500 employees in 2000. Revenues were about £131.5 million and rose dramatically in 2001 to £190.9 million, when pretax profits were about £9 million.

The fleet continued to expand. A Boeing 737 airliner was added, while the F27 fleet was upgraded. The company began to fly people via summertime charter routes. The last of the Lockheed Electras was retired in 2003.

COMPANY PERSPECTIVES

Our aim is to be the safest, most responsive and reliable operator of low cost services in Europe.

JET2.COM LAUNCHED 2003

The new passenger charter operation thrived even in the post-9/11 environment. In February 2003, the company's Channel Express (Air Services) subsidiary launched a scheduled passenger airline, dubbed Jet2.com, out of Leeds Bradford Airport. It aimed to serve both business and leisure travelers, offering connections to European capitals and sun and ski destinations. By the end of the year, Jet2.com was operating scheduled routes to Alicante, Amsterdam, Barcelona, Belfast, Faro, Geneva, Malaga, Nice, Palma, and Prague. The company had a fleet of a half dozen Boeing 737s, all owned rather than leased (a couple of its A300 "Eurofreighters" were leased). Some were the QC, or Quick Change model, which could be converted between passenger and cargo configurations in 30 minutes. Another eight Boeing 737s were ordered during 2003.

Dart Group continued to fly high in 2004. Its Channel Express (Air Services) subsidiary was designated the Royal Mail's leading aircraft provider, calling for seven Boeing 737s to be dedicated to the account. The passenger airline, Jet2.com, continued adding routes (Belfast-Prague). It opened a second hub in Manchester International Airport, the largest in the North, with the first flight going to Budapest. In September, Jet2.com counted its millionth passenger. In spite of cheap fares, from about £15 to £32, the new airline was beating others in customer satisfaction and on-time performance.

Turnover reached £268 million in the fiscal year ended March 2005. Pretax profit was £13.5 million, 50 percent higher than in the previous few years. The company had 1,700 employees, about 500 of them at Jet2.com, which had flown 1.3 million passengers during the year. In the summer, Dart Group's shares migrated from the London Stock Market to its affiliated AIM exchange, which had less cumbersome regulatory requirements.

ALL-JET FLEET IN 2005

In January 2005, the company sold off its last Fokker F27 turboprop. Dart Group announced the purchase of its largest aircraft yet in July 2005, two Boeing 757s which had a capacity of 235 passengers each (100 more than Jet2.com's Boeing 737s). This was added to an existing fleet of 20 Boeing 737s. The temperature-controlled fleet of subsidiary Fowler Welch-Coolchain had 660 vehicles, covering a network ranging across Maasland in the Netherlands, Portsmouth, Teynham in Kent, Spalding in Lincolnshire, and Gateshead in Tyne & Wear.

In August 2005, the company sold Benair Freight International Limited and Benair Freight Pte to the global logistics and marine services giant Gulf Agency Company for £5.1 million ($9 million). Benair then had five offices in the United Kingdom and one in Singapore. The divestiture allowed Dart to focus on its two main businesses, temperature-controlled distribution and aviation services.

By this time, Jet2.com had added new bases in cities including Blackpool and Edinburgh. It was adding new destinations and stepping up frequencies on existing routes to at least daily flights in most instances. Fowler-Welch Coolchain was also advancing, spending £880,000 ($1.5 million) to have GPS provider Thales UK outfit its 750 refrigerated trailers with a satellite tracking and temperature monitoring system.

PRINCIPAL SUBSIDIARIES

Channel Express (CI) Limited (Guernsey); Channel Express (Air Services) Limited; Fowler Welch-Coolchain BV (Netherlands); Fowler Welch-Coolchain Limited.

PRINCIPAL DIVISIONS

Distribution; Aviation.

KEY DATES

1971:: Carpenter's Air Services and Carpenter's Transport are formed to ship and distribute fresh flowers from Guernsey.
1975:: Express Air Freight (CI) is formed.
1978:: Express Air begins operating its own airplane.
1983:: Channel Express companies take over Express Air activities; Aviation Services and Distribution divisions are formed.
1988:: Channel Express Group Ltd. goes public on the U.K. Unlisted Securities Market.
1990:: Freight forwarder Benair Freight Ltd. is acquired.
1991:: Shares migrate to the London Stock Exchange; company is renamed Dart Group PLC.
1994:: Super Dart Heralds begin to be phased out in favor of Fokker F27 aircraft; Fowler Welch is acquired.
1996:: Airbus A300 jets are acquired for conversion into freighters.
1999:: Coolchain Group is acquired; new distribution center opens in Portsmouth.
2001:: Passenger charter flights begin.
2003:: Jet2.com low cost airline is launched in Leeds; Fowler Welch and Coolchain merge.
2004:: Jet2.com opens base in Manchester.
2005:: Benair subsidiary and F27 aircraft are sold off; shares migrate to AIM exchange.