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08 March 2014

Summary company financials (£m)
Year end March FY2012 FY2013 FY2014E FY2015E
Price £2.81 Revenue £683.0 £869.2 £1,153.2 £1,377.9
Market cap (£m) £408.7 25.8% 27.3% 32.7% 19.5%
Enterprise value (£m) £303.7 EBITDA £62.9 £83.4 £108.6 £135.2
9.2% 9.6% 9.4% 9.8%
Free float 61% Net income £22.7 £31.2 £33.5 £44.1
Unrestricted net cash -£52.3 -£75.1 -£86.9 -£105.0
EV/Sales 0.44 0.35 0.26 0.22
EV/EBITDA 4.83 3.64 2.79 2.25
PE 18.0 13.1 12.2 9.3
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Dart Group plc
Revenue growth
EBITDA margin
It is rare in practice to find examples of high revenue growth stocks trading at attractive value metrics. A stock such as ASOS Plc
may have an exciting growth story for example with 40% annual revenue growth, but its shares trade at a heady 5.3x Enterprise
Value to Revenue and more than 100x PE.

An exception, however, exists in one of the largest UK package holidays operators, internet site The business is
set to comprise more than 50% of the revenue of AIM-listed, 12x PE, Dart Group Plc, and has had a remarkable growth trajectory. (J2H) was launched by the parent company Dart Group Plc in 2007, and here is its annual growth since have
financials been broken out:

Year J2H customers Growth J2H Revenue % Dart Group revenue J2H EBITDA
2008 34,000
2009 36,000 6%
2010 64,000 78%
2011 98,000 53% £48m 9%
2012 216,000 120% £115m 17% £2.8m
2013 417,390 114% £245m 28% £6.8m
2014E* 848,500 103% £515m 48% £15.5m
*The estimated figures for full year to March 2014 are based on the H1 2014 disclosure from Dart Group Plc. Typically 75% of Jet2Holidays
revenue is contributed from the H1 period.

With the revenue from set to represent the majority of Dart Group revenues by mid calendar 2014, and growth
rates exceeding 100%, the low valuation rating of Dart looks set to become increasingly obvious.

The remaining divisions of Dart Group are not without their own value. Dart also operates the pan-European budget airline Jet2,
which, by owning 42 out of its 50 aircraft outright, is growing at 19% per annum without the operational leverage of some its
peers. Jet2 had revenues to FY March 2014 we estimate at £672m, flying 5.6m passengers. This still leaves ample room for growth,
and with Jet2 around 10% the size of Ryanair or EasyJet -- plus given Jet2’s superior growth rates -- we would not discount Jet2
becoming a substantial player. Jet2 operating margins, at 5%, versus a comparable 12% margin at Ryanair and 11% margin at
EasyJet, may also have upside as this division matures.

Dart also owns chilled food products distribution group Fowler Welch. At just 18% of group revenue, and with 2% growth,
investors may feel less excited about this division. It does however represent a cashflow positive contribution to the group offering
stability in periods of potential airline and travel revenue volatility. Chilled food distribution also has higher barriers to entry than
ambient foods, due to specific cold chain regulations, a more capital-intensive infrastructure requirement, the higher granularty of
demand, andthe greater need for a partnership relationship with customers. Dart guides a positive outlook for this division with a
new distribution centre allowing them to accept an encouraging pipeline of new business opportunities.

So to recap, Dart Group Plc – the core value driver an internet package holidays website, in the forward financial
year Jet2Holidays to deliver more than 50% of group revenue and for the last 3 years been growing at c. 100% per annum. This
division is supported by businesses comprising a budget airline, and chilld food distribution, both of which have shown consistent
profitability and are posting positive revenue growth.

Dart Group is set to have more than £100m net unrestricted cash at YE March 2015 (£250m net cash including restricted amounts)
and a market capitalisation of £409 million. Since its listing in 1991, Dart has been led by 38% shareholder and founder Phil ip
Meeson. Investors looking for reassurance as to Philip’s ability as CEO should take comfort from Dart’s average 16% per annum
operating profit and shareholders funds growth since 1991 (for comparison Berkshire Hathaway achieved 15% per annum
shareholders funds growth over the same period). Whilst there have been no dedicated equity raisings since IPO to finance this
growth, option issuance has increased share count by around 1% per annum. In his youth Philip was a pilot with the Royal Airforce
and also five times British Flight Aerobatics Champion. Philip has controlled Dart Group and its precursor companies since 1983
and our take is that he combines an attractive combination of business pragmatism with risk taking, as well as having a long period
of experience in the airline and travel business sectors.