25th Jan 2023 10:29
(Alliance News) - easyJet PLC has piloted itself into FTSE 100 promotion contention, as shares shot up another 9.2% on Wednesday morning.
The stock traded at 511.18 pence in late morning trade, though earlier reached as high as 522.50p. easyJet is up 55% since the start of January.
The budget carrier said it expects its annual outturn to top market expectations. It has seen a surge in booking and demand.
In the financial first quarter that ended December 31, passenger numbers grew 47% year-on-year and its load factor improved to 87% from 77%.
easyJet said it made a headline pretax loss of GBP133 million, narrowed from GBP213 million a year earlier. Revenue jumped 83% to GBP1.47 billion from GBP805 million.
Bookings since the turn of the calendar year have surged, with the company hailing "record-breaking weekends for sales revenue this month".
"easyJet's results are a classic recovery story, with the airline on track to beat profit expectations in the second half of this year. More people are beginning to travel again, while the airline has reshaped its routes and proposition," RBC Brewin Dolphin analyst John Moore commented.
"easyJet is not far away from a return to the FTSE 100 and, if the airline can deliver on expectations, it should get there later this year."
With a market capitalisation of GBP3.93 billion, easyJet's equity value is slightly chunkier than some current FTSE 100 constituents. Sports Direct-owner Frasers Group PLC is worth GBP3.65 billion. Insurer Hiscox Ltd is valued at GBP3.88 billion, and student accommodation investor Unite Group PLC has a market cap around GBP3.91 billion.
However, that does not immediately make easyJet a shoo-in for promotion.
The quarterly FTSE index review is based on changes to market capitalisation and sees those FTSE 250-listed stocks that are the 90th biggest or larger in the Main Market move up, and FTSE 100 companies that are 111th biggest or smaller move down, keeping the indices balanced.
The next FTSE Russell index review result is announced on March 1. Indicative changes are reported on February 21.
easyJet was sent to the FTSE 100 departure lounge back in June 2020, after the Covid-19 pandemic sapped demand for travel and emptied skies.
For the most part, it has been tough going for the travel company since then, but Wednesday's update offers promise.
easyJet expects its annual profit to beat market forecasts.
easyJet is expected to make pretax profit of GBP126 million for the current financial year. In financial 2022, it had made a statutory pretax loss of GBP208 million and a headline pretax loss of GBP178 million.
Should easyJet achieve an annual profit, it will be its first since financial 2019, prior to the Covid-19 pandemic blocking travel and emptying skies.
Its statutory pretax loss was GBP1.04 billion in financial 2021, narrowed from GBP1.27 billion the year earlier. In financial 2019, it had made a pretax profit of GBP445 million.
By Eric Cunha, Alliance News news editor
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