easyJet (LSE: EZJ) is currently up 7.5%, after announcing that it expects to deliver record profits for the fourth year in a row when it publishes its full-year results on 18 November.
In a trading update and pre-close statement for the year to 30 September issued this morning, the budget airline reports that pre-tax profit for the full year is now anticipated to be between £575m and £580m, up from previous guidance of £545m to £570m.
The company says that its revenue per seat (at constant currency) was driven by a strong finish to the summer, and is expected to have increased by about 1.5% over the final quarter and by around 2% over the second half.
Cost per seat is anticipated to have risen around 0.7% in the second half, due to increases in regulated airport charges, navigation and increased load factor costs, but easyJet say the increase was minimized by its continuing “lean initiatives”.
The company comments that its revenue for September was boosted by about £5m, because the strike by Air France pilots led to people switching to easyJet. In addition, unit fuel costs for the second half are anticipated to be favourable by £2m and that exchange rates in H2 will have benefitted the company to the tune of £15m compared with the same period in 2013,
easyJet also reports that, because it has revised its dividend policy to raise the payout-ratio to 40% of post-tax profit, up from 33% previously, the company will be declaring its largest-ever ordinary dividend payout.
Commenting on the pre-close statement, CEO Carolyn McCall said:
“We finished the year strongly. Our performance demonstrates our continued focus on cost and progress against all our strategic revenue priorities and further emphasises easyJet’s structural advantage against both legacy and low-cost competition.
“Everyone at easyJet is aligned behind our strategy of offering our passengers low fares to great destinations with friendly service and a focus on cost control which will ensure that we can continue to deliver sustainable growth and returns for our shareholders.“
This morning’s gain means that easyJet’s share price is now up 10.4% on this time last year, compared with the FTSE 100’s mere 0.6% rise over the same period. And over the past five years, easyJet’s shares have soared by almost 260%, leaving the FTSE 100 far below, with its mere 30% increase.
