Airline looks to increase capacity with additional planes in the New Year.
EasyJet sticks to outlook as profits soar 41% higher
- The airline flew a record 88.5m passengers in the past year, up 10.2% and state that bookings for next summer look “promising”.
- EasyJet boosted its profits through substantial savings leading to an announcement of a 43% increase in the dividend.
- We recommend easyJet as a ‘buy for medium risk investors seeking a balanced portfolio.
EasyJet reported full-year profits in line with expectations today, and said forward bookings for next summer are already at a promising level. Pre-tax profit rose 41% to £578m on revenue up 17% to £5.9bn. The airline carried 88.5m passengers, up 10.2% on the previous year with revenue per seat rising 6.4%. The company said it had ordered 17 new planes from Airbus and plans to increase its capacity by 10% in the New Year. Profits were also boosted by savings of £107m during the year and the dividend was increased by 43%.
While all of this is good news it was largely as expected and the shares dropped back 2.9% in a weak market background. Fuel costs are expected to rise although the recent fall in the oil price should improve sentiment if it is sustained. Brexit remains another factor looming over the sector but EasyJet said it has almost reached the ownership threshold required to continue flying in the EU.
We recommend the shares as a buy for medium risk investors seeking a balanced portfolio as the company has good momentum with its trading, a relatively strong balance sheet and there are a number of opportunities for further growth.
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