Numis hails new Easyjet divi policy, Airbus order

18th Sep 2014 10:40

Numis Securities repeated its 'buy' rating for Easyjet on Thursday, hailing the budget airline's decision to lift its dividend payout ratio and order 27 new planes from Airbus.Easyjet announced that it will return 40% of its profits to shareholders from the financial year ending 30 September, up from its previous policy of paying out one third of the bottom line.Numis welcomed the move and estimate that this should increase its dividend for this year to 50.8p, up from its previous forecast of 39.7p.Meanwhile, the company also said it has reached a discounted deal with Airbus to exercise existing purchase rights over 27 current-generation A320 aircraft. The group said they were acquired at a "very substantial price discount from the list price" of $76m each, or $2.06bn in total."We believe that the dividend hike, promise of further returns of cash to shareholders and the aircraft option exercise provide compelling evidence of management's confidence in easyJet’s strong market position and growth prospects: a view with which we concur," Numis said.The broker kept a 2,100p target price for the stock, which was trading 2.2% higher at 1,368p by 10:43.