18th Apr 2024 09:45
(Alliance News) - Analysts expect profit forecasts for easyJet PLC to climb after its latest trading update painted a "promising picture."
Shares in easyJet rose 3.1% to 534.00 pence in London on Thursday morning. The wider FTSE 100 was up 0.5%.
The Luton, England-based budget carrier expects to report a 22% surge in revenue for the six months to March 31, rising to GBP3.27 billion from GBP2.69 billion.
Its headline pretax loss slimmed to GBP350 million from GBP411 million.
"This improvement was driven by target capacity growth where demand was strongest, alongside productivity and utilisation benefits which enabled ex-fuel unit costs to remain flat year-on-year", easyJet said.
Conflict in the Middle East cost the company around GBP40.0 million in the first half of this year, and flying into Israel has been suspended for the summer.
easyJet said that "Easter demand was particularly strong" and "bookings for summer 2024 continue to build well", signalling the growth potential for customer orders in the second half of the year. easyJet Holidays, the company's package holiday business, has currently sold 70% of its programme for this summer.
The company maintained its outlook for a year-on-year growth in customers of more than 35% in the package holidays arm for financial 2024.
Neil Shah, executive director of Content and Strategy at Edison Group said the update "paints a promising picture."
"With winter losses reduced by over GBP50 million compared to the previous year, the airline demonstrates resilience in the face of industry challenges," he commented.
Shah highlighted "notable growth metrics" including an 8% year-on-year increase in passengers and revenue per seat, and a significant rise in pretax profit for its holiday segment, soaring to around GBP31 million, "a staggering 206% increase" when compared to the year before.
Furthermore, the "buoyant bookings" for the upcoming summer season, with 60% of the third quarter program and 30% of the fourth quarter program already sold, "hint at clearer skies ahead for easyJet."
Liberum's Gerald Khoo pointed out management guidance for a pretax loss between GBP340 million to GBP360 million was better than the consensus expectation of a GBP407 million loss.
He noted this improvement came despite higher fuel costs, up 6% per seat, and the Middle East conflict.
Khoo said Holidays posted a strong improvement in profit while a 42% increase in customers compared to the 35% goal for the whole year.
Second quarter revenue per seat, up 8% on the year prior, was ahead of guidance for a mid-single digit increase, he added.
With the outlook also positive, Khoo expects "upward pressure" on the full-year consensus.
By Jeremy Cutler, Alliance News reporter
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