easyJet (LSE: EZJ) is currently up 7.5%, after announcing that it expects todeliver 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 statementfor the year to 30 September issued this morning, the budget airline reports that pre-tax profit for the full year is now anticipatedtobe 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 andby around 2% over the second half.
Cost per seat is anticipated to have risen around 0.7% in the second half, due toincreases in regulated airport charges, navigation and increased load factorcosts, but easyJet say the increase was minimized by its continuing lean initiatives.
The companycomments that its revenue for September was boosted by about 5m, because the strike byAir 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 havebenefitted the company to the tune of15mcompared with the same period in 2013,
easyJet also reportsthat, because it hasrevised its dividend policy to raise thepayout-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 easyJets 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 mornings gain means that easyJets share price is now up 10.4% on this time last year, compared with the FTSE 100s mere 0.6% rise over the same period. And over the past five years, easyJets shares have soared by almost 260%, leaving the FTSE 100far below, withits mere 30% increase.
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Jon Wallis has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
