19th Nov 2019 08:21
(Alliance News) - Budget airline easyJet PLC reported a "strong" end to its recent financial year on Tuesday, with financial results meeting expectations.
The company also announced a new Holidays business as well as a plan to make all flights net zero carbon, both from Tuesday.
The Holidays business push takes advantage of the recent demise of travel firm Thomas Cook, while easyJet said the environmental measure will cost it about GBP25 million in its new financial year.
easyJet's pretax profit for the year to September was 3.4% lower at GBP430 million, with the headline figure dipping 26% to GBP427 million. This is towards the top of the guided range of GBP420 million to GBP430 million, for headline pretax profit.
easyJet will be paying a dividend of 43.9 pence per share, meaning a 25% cut from the year before. It does make any returns at the half-year stage.
Revenue was 8.3% higher at GBP6.39 billion, with passenger numbers rising 8.6% to 96.1 million. easyJet said revenue growth was also helped by a 10% increase in capacity.
The load factor declined to 91.5% from 92.9%. This is a measure of how many available seats a transport operator, such as an airline or rail company, fills.
The company's revenue per seat, however, declined by 1.8% due to weaker consumer confidence in the UK, though this was offset by "self-help initiatives" as well as strikes at rivals Ryanair Group Holdings PLC and British Airways, which is owned by International Consolidated Airlines Group SA.
The cost per seat on a headline basis rose 1.5% due to higher fuel costs and foreign exchange movements. easyJet delivered GBP139 million of cost savings during the year, it added.
"easyJet finished the 2019 financial year with a strong performance across the business and a record summer," said Chief Executive Johan Lundgren.
"More customers than ever are coming to easyJet as their airline of choice, with a record 96.1 million customers flying with us this year. Our self-help initiatives meant we have been able reduce costs and drive a better yield performance which has improved revenue per seat in the second half of the year."
easyJet on Tuesday also announced a new business, easyJet Holidays, which will offer beach and city holidays across the airline's network. It expects this to launch by Christmas in the UK and be "at least" breakeven in its new financial year.
"I am really thrilled that with the launch, before Christmas, of our brand new easyJet Holidays business we are bringing flexibility and excellent value to the holiday market," said Lundgren.
"We are now able to offer our customers more than 100 amazing beach and city holiday destinations, pairing Europe's best short-haul flight network with more than 5,000 of Europe's best hotels. We believe there is a gap in the market for a modern, relevant and flexible business for today's consumer," he continued.
Looking forward on the trading front, easyJet said forward bookings for the first half of its new financial year are "reassuring", and are slightly ahead year-on-year. Capacity growth is expected at the lower end of easyJet's 3% to 8% historically guided range.
Headline revenue per seat at constant currency for the first half ending March is expected to rise by low to mid-single digits. The headline cost per seat, excluding fuel, at constant currency for the entire year is guided to rise by low single-digits.
Shares in the FTSE 250 airline were 3.1% higher in early trade in London on Tuesday at 1,315.96 pence each.
By George Collard; [email protected]
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