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    RADIO ROXI TIMELESS TUNES

Local News

EasyJet reveals £34m windfall after record profit performance | Business News

today28/11/2023

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EasyJet has reinstated its dividend for the first time since the COVID crisis, while revealing a return to annual profitability.

The no-frills carrier said its headline measure of profit before tax over the 12 months to 30 September came in at £455m – a £633m improvement on the previous year and the first positive figure since the public health emergency struck in 2020.

It credited record profitability over the second half of its financial year, which covered the summer peak, as passenger numbers – and the amount spent on extras per seat – surged to help offset a hit from higher fuel bills.

The company announced a final dividend of 4.5p per share – equivalent to a £34m payout – and remained upbeat for the current year, despite an admission that the Israel-Hamas war would continue to prove a drag on immediate earnings.

A total of 4% of its flying programme is currently grounded because easyJet is not operating flights to Israel and Jordan.

Egypt services are also being affected.

EasyJet cautioned that first quarter losses would not improve compared to the same period last year.

But the company said the shareholder reward for 2023, equivalent to 10% of after-tax profits, was expected to rise to 20% in 2024 despite the disruption and continued pressure on household budgets from the cost of living crisis.

The firm credited booking strength for summer 2024, coupled with supply constraints in Europe, and said revenues per seat were currently 12% higher and expected to remain elevated.

Johan Lundgren, easyJet's chief executive
Image:
Johan Lundgren, easyJet’s chief executive

Chief executive Johan Lundgren told investors: “”We see a positive outlook for this year with airline and holidays bookings both ahead year on year and recent consumer research highlights that around three quarters of Britons plan to spend more on their holidays versus last year, with travel continuing to be the top priority for household discretionary spending.”

Shares – up 25% in the year to date but almost a third below their pre-pandemic peak – opened 1.5% higher.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “easyJet is adamant that households will continue to prioritise travel in the new financial year.

“There are early indications that’s true, but that could change at short notice if the UK folds into recession.

“The conflict in the Middle East also has the potential to dent performance and will need monitoring closely.

“The good news for easyJet is that its problems are all outside of its control, which tells the market that its proposition is about as good as it can be – and is waiting to take-off once conditions allow.”



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