Strong finish to year on the runway for easyJet

22nd Jul 2011 07:01

Assuming normal market conditions, no frills airline easyJet expects full-year pre-tax profits to fall in the range of £200m to £230m. Market consensus is for an adjusted profit before tax of £183.1m.Shares roared 14.17% ahead to trade at 357p at 13:05 on Friday afternoon.easyJet has seen strong demand in the July-September quarter leading to higher than expected load factors and yields. Consequently, second half total revenue per seat is now expected to improve by around 5% to 6% for the second half with planned improvement in yields, bag charges and other ancillary revenues. Consequently full year total revenue per seat at constant currency is expected to grow by around 2% to 3%.In the second quarter of 2011 (the third quarter of easyJet's fiscal year) the number of seats flown rose by 17.1%, while load factors improved to 86.3% from 86.1%. There was a 17.3% growth in passengers (8.8% growth excluding the impact of the 2010 volcano). Total revenue grew by 23.2% to £935m, while total revenue per seat grew by 5.2% to £56.02, up 4.6% on a constant currency basis.Passenger revenue grew by 2.5% to £44.37 per seat, while ancillary revenues were up sharply (17.0%) to £11.65.There have been some pockets of weakness, the company said, namely North African routes which continue to show some weakness due to concerns about the political situation and a short-term over-supply on beach routes to Spain following redeployment of tour operator capacity. In Germany, revenue per seat continues to be affected by the introduction of air passenger duty and performance in the UK regions reflects the impact of public sector cut backs.On the other hand, business on routes to and from France, Switzerland, Spain, Italy and London has been vibrant. As at the end of June, the airline had net cash of £112m."The strong operational and commercial performance in the quarter reflects the continued successful implementation of the strategy we outlined last November," claimed easyJet chief executive, Carolyn McCall."August is the important trading month for easyJet but with over 75% of summer seats now sold we expect at current fuel and exchange rates to deliver a pre-tax profit for the year ended 30 September 2011 of between £200 million and £230 million assuming normal conditions and a ROCE [return on capital employed] for the year of between 10% and 12%," McCall continued."Against the backdrop of high fuel prices and an uncertain economic environment, the strength of easyJet's trading demonstrates it is well placed to succeed," McCall maintained.--jh