easyJet (EZJ) is blowing away the competition as both rapidly restructuring legacy carriers, and weaker low-cost rivals, desperately slash capacity. As predicted by the airline last month, losses halved during the traditionally weaker first half driven by Brits fleeing the terrible winter weather. Of course, an early Easter helped, but there's no disguising easyJet's competitive advantage and, with supply still constrained, about 50 per cent of the seats available for the second half have already been sold.
Revenue per seat grew 8.6 per cent on a constant currency basis during the first half, just ahead of company forecasts. Improved yield was the biggest driver, led by easyJet's decision to thin out the winter schedule and switch planes from Madrid to more profitable bases. Allocated seating generated more revenue than speedy boarding, too, and the early Easter helped to add 83p of revenue per seat. That easily offset rising costs per seat, up 3.4 per cent before fuel, mostly due to higher airport charges and disruption and expensive de-icing during a particularly cold winter. There's still no final decision on big plane order, but adding extra larger, more efficient A320s to the fleet saved £3m on fuel, offsetting some of the cost inflation.
Broker Investec Securities expects full-year adjusted pre-tax profit of £413.7m, giving adjusted EPS of 83.4p (from £317m and 61.7p in 2012).
EASYJET (EZJ) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,193p | MARKET VALUE: | £4.73bn | |
| TOUCH: | 1,193-1,195p | 12-MONTH HIGH: | 1,210p | LOW: 475p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 421p* | NET CASH: | £433m | |
| Half-year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 1.47 | -112 | -21.2 | nil |
| 2013 | 1.60 | -61.0 | -12.0 | nil |
| % change | +9 | - | - | - |
Ex-div: - Payment: - *Includes intangible assets of £456m, or 115p a share | ||||
