27th Nov 2024 08:53
(Alliance News) - easyJet PLC on Wednesday reported a jump in annual profit, reflecting higher capacity, rising prices, and growth in the firm's package holidays business.
The Luton-based budget airline said pretax profit of GBP602 million for the financial year that ended September 30 was up 39% from GBP432 million a year prior. Headline pretax profit surged 34% to GBP610 million from GBP455 million.
Revenue rose 14% to GBP9.31 billion from GBP8.17 billion. This reflected an 8.4% increase in capacity to 100.4 million seats from 92.6 million a year ago, the continued growth of easyJet holidays, and total per seat pricing strength.
In the fourth quarter, revenue rose to 9.3% to GBP3.41 billion from GBP3.12 billion a year prior, and headline pretax profit climbed 9.2% to GBP724 million from GBP663 million.
John Moore, senior investment manager at RBC Brewin Dolphin, said: "The airline's results are robust, backed by strong financials, an increasingly solid balance sheet, and growth in its package holidays business. Demand for holidays continues to prove resilient, despite fears over the pent-up demand from the pandemic dissipating and the cost-of-living crisis taking its toll on household spending."
easyJet passenger revenue increased by 9.6% to GBP5.72 billion from GBP5.22 billion while passenger revenue per seat grew slightly by 0.9% to GBP56.90 from GBP56.37. Ancillary revenue rose 22% to GBP3.59 billion from GBP2.95 billion. Airline ancillary revenue per seat increased by 4.2% to GBP24.45 from GBP23.47.
Holidays revenue rose 47% to GBP1.14 billion from GBP776 million.
Fuel costs rose 9.4% to GBP2.22 billion from GBP2.03 billion.
"This strong performance - resulting in a 34% increase in our annual profits - reflects the effectiveness and execution of our strategy as well as continued popularity of our flights and holidays. It also represents a significant step towards our goal of sustainably generating over GBP1 billion annual profit before tax," outgoing Chief Executive Officer Johan Lundgren said.
Lundgren's replacement as CEO, Chief Financial Officer Kenton Jarvis, who takes on the role early next year, said the annual performance was characterised by "capacity growth, cost discipline and the continued success of easyJet holidays, delivering reduced winter losses and culminating in a record summer profit."
easyJet recommended a 12.1 pence per share dividend, more than doubling from 4.5p the year prior.
The airline said it is committed to maintaining regular returns to shareholders through dividends, while returns of excess capital will "continue to be assessed".
Looking ahead, easyJet said it expects to "reduce winter losses with a significant improvement in Q1". The second-quarter will be "impacted by the timing of Easter and a prior year release of aged balances".
easyJet said the first quarter of the new financial year is 80% sold, and the second quarter 26% sold. Capacity is expected to grow by 3% with easyJet Holidays projected to see a 25% increase in customers from the current base of 22.6 million. In the burgeoning easyJet Holidays package getaway arm, the first half of the new financial year is 82% sold, the firm added.
Shares in easyJet were up 2.7% to 555.00 pence each in London on Wednesday. The wider FTSE 100 index was little changed.
By Jeremy Cutler, Alliance News reporter
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