Capacity may still be a concern for European airlines, but easyJet (EZJ) is making the best of a bad situation. The 3m boost in passenger numbers to 36.8m during the first six months was aided by capacity reductions by other airlines in some of easyJet’s markets, namely the collapse of Monarch and Air Berlin.
Around 0.7m of the new passengers came directly from the latter entity after easyJet bought some of Air Berlin’s operations at Berlin’s Tegel airport. The additional 1.2m seats flying from Tegel contributed to the 7.8 per cent increase in the budget airline’s capacity, with load factor (utilisation rate) up 0.9 per cent to 91.1 per cent. The Tegel factor fed into an 8.3 per cent increase in revenue per seat (at constant currencies) at the half-year, but management is targeting further unit gains by filling more seats with business travellers and those on in-house packaged holidays. Management thinks that the resultant passenger mix, alongside plans to address costs associated with flight disruptions and cancellations, should drive a “significant” improvement in profit per seat.
Analysts at Numis expect pre-tax profits of £468m in the year to September, giving EPS of 101p, up from £408m, and 81.9p in FY2017.
| EASYJET (EZJ) | ||||
| ORD PRICE: | 1,740p | MARKET VALUE: | £6.91bn | |
| TOUCH: | 1,739-1,740p | 12-MONTH HIGH: | 1,768p | LOW: 1,136p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 668p** | NET CASH: | £665m | |
| Half-year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 1.83 | -236 | -48.9 | nil |
| 2018 | 2.18 | -68 | -13.7 | nil* |
| % change | +19 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Full-year dividend of 40.9p paid in Mar 2018 **Includes intangible assets of £589m, or 148p a share | ||||
