Quickly banking away from the UK following the EU referendum doesn't seem to have done eastern European-focused carrier Wizz Air (WIZZ) any harm. In July, the group said it would halve its intended second-half growth to the UK and if the performance in the first half is anything to go by, it has the growth across the board to handle the turbulence. Passenger numbers rose more than 17 per cent to 12.5m, helping turnover up by a tenth. Interestingly, while total ticket revenue went up by 4 per cent to €567m (£504.68), ancillary revenue - related to things like drinks and snacks - rose a whopping 21.3 per cent to €354m.
Importantly, while average revenue per passenger fell 6.8 per cent to €73.20, the drop in unit costs fell by a greater 11 per cent, helping to support the post-tax profit margin, which rose 5.7 percentage points to 27.5 per cent. The fall in costs was almost entirely down to a drop in fuel costs, which is expected to continue, with management guiding to a 20 per cent drop in fuel-related costs per available seat kilometre for the financial year. It will need to hope this is true given the prediction by management that lower air fares are predicted to "persist well into 2017".
Analysts at Davy expect pre-tax profit of €272m in the year to March 2017 leading to EPS of 449.5¢ compared with €201m and 361.5¢ in FY2016.
| WIZZ AIR (WIZZ) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,576p | MARKET VALUE: | £903m | |
| TOUCH: | 1,574-1,578p | 12-MONTH HIGH: | 2,021p | LOW: 1,380p |
| DIVIDEND YIELD: | nil | PE RATIO: | 4 | |
| NET ASSET VALUE: | 1,659¢ | NET CASH: | €799m | |
| Half-year to 30 Sep | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2015 | 836 | 191 | 348 | nil |
| 2016 | 921 | 263 | 443 | nil |
| % change | +10 | +38 | +27 | - |
Ex-div: na Payment: na £1=€1.12 | ||||
