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FAT PROPHETS: A strong summer for the European airline industry saw EasyJet post record full year results. In the year to September 2015 the group saw pre-tax profits come in at the midpoint of guidance (£675m-£700m) with an 18% increase to £686m. Passenger numbers increased by 6% to 68.6m and revenue rose by 3.5% to £4.686bn but on a constant currency basis revenue was 6.5% higher. Revenue per seat rose by 1.5%.
EasyJet’s pre-tax margin improved to 14.6% from 12.8% and the return on capital employed rose to 22.2% from 20.5%. This was as the cost per seat fell by 3.4% with the key drivers being lower fuel prices and currency savings. Basic earnings per share increased by 21.5% to 139.1p and the dividend was increased by 21.6% to 55.2p. This was the fifth consecutive year of record profits for EasyJet. Not bad for an airline!
The airline appears confident with a plan to buy 36 new aircraft from Airbus which are set to be delivered from 2018 to 2021. The greater efficiency levels of these planes is expected to save £27m in costs by 2021. EasyJet forecasts passenger growth of 7% a year and expects to remain a “winter in its markets.” The airline appears to have broader appeal than Ryanair with even David Cameron and Ed Miliband using the airline.
However, near-term trading may be weak with delays at airports in Paris and the costs related to getting passengers home from Egypt. Further safety measures in Europe may increase security checks at airports and hit tourism.
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