easyJet shares soar 3% as group boasts ‘excellent performance’

Looking at what the easyJet results means for investors

Article updated: 15 May 2018 10:00am Author: Graham Spooner

  • The budget airline released its interim results this morning and its shares hit a 2-year high
  • The group achieved its milestone as passenger numbers increased by 3m to 36.8m
  • The Share Centre recommends easyJet as a medium risk ‘buy for investors

High-flying easyJet updated the market this morning with ‘excellent’ interim results as shares swell 3% pushing the group to a 2 year high. Its strong performance was helped by a positive trading environment and higher load factors across its routes, capacity reductions by other airlines and an early Easter bank holiday.

Announcing an optimistic assessment of prospects as described by CEO Johan Lundgren as ‘one of our best in the winter trading period’, the budget airline stated that revenue was up 19.5% to over £2bn.

As well as achieving its milestone of carrying 13m business passengers a year, whole passenger numbers increased by 3m to a total of 36.8m and 0.7m of these were attained from easyJet’s new Berlin Tegel operations.

Looking ahead, easyJet expect increased profits for the year; profits are geared to the second half and although there was a headline loss of £18m, this was an improvement of £194m.

The outlook for the year remains strong as forward bookings are up on last year and profits are expected to be in the range of £530m to £580m while capital expenditure for the financial year is expected to be in line with previous guidance of £1.2bn.

Following strong results, the low-cost airline plan to increasingly invest in easyJet Holidays and a new loyalty scheme, as well as introduce initiatives in order to grow business passengers.

With figures well ahead of forecasts, shares in easyJet soared by 3% in early morning trading. It is expected that the industry will continue to benefit from increased demand for leisure and business travel around Europe and easyJet is in a particularly strong position to reap the rewards owing to its low prices. Due to a favourable trading market, a relatively strong balance sheet, and opportunities for further growth, we recommend the shares as a ‘buy’ for medium risk investors.

All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.

Graham Spooner portrait photo
Graham Spooner

Investment Research Analyst

Graham started out as a fully authorised dealer on the Stock Exchange trading floor and for various banks, before becoming an FSA-approved investment adviser. Now a respected voice in the media, Graham’s share tips and comments on the markets are frequently sought by the national press.