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(Sharecast News) - Budge airline easyJet swung to a profit in its annual results after a record second-half financial performance as it delivered a positive outlook for the year ahead and reinstated its dividend.
The company, which hasn't paid a dividend to shareholders in three years, declared a final dividend of 4.5p per share, amounting to £34m and equal to 10% of after-tax headline profit. As previously stated, the airline intends to increase this to 20% of profits in the current financial year.
EasyJet reported a headline pre-tax profit of £445m in the 12 months to 30 September, up from a loss of £178m the year before and in line with management's guidance of £440-460m.
Total revenue was up by 42% at £8.17bn as a result of pricing strength, increased flown capacity, improved load factors and the continued growth of easyJet holidays.
Capacity increased 14% year-on-year to 92.6m seats, passenger numbers were up 19% at 82.8m, while the load factor - a key measure of how full airline's planes are - improved by 3 percentage points to 89%.
However, headline costs were also up 30% at £7.72bn due increased volumes, higher fuel costs and "industry-wide inflationary pressures", the company said.
"Our record summer performance demonstrates the success of our strategy and that demand for easyJet remains strong as customers choose us for our network and value," said chief executive Johan Lundgren.
"We see a positive outlook for this year with airline and holidays bookings both ahead year on year and recent consumer research highlights that around three quarters of Britons plan to spend more on their holidays versus last year with travel continuing to be the top priority for household discretionary spending."
Easyjet said the new financial year has started positively with strong profit growth in October and early bookings for the second quarter ahead of last year.
However, it did warn that current-year results will be impacted by the ongoing conflict in the Middle East, with flights to Israel, Jordan and Egypt representing 4% of capacity. Flights to Israel and Jordan are currently paused.
"Accordingly, despite positive underlying strength, easyJet does not currently expect its Q1 loss to improve year on year. The present booking strength for summer 2024, coupled with supply constraints in Europe, provide a positive outlook for the year as a whole."
