EasyJet dishes out dividend as profits fly

'Robust' easyJet expects annual profits of £240m-£250m, and says it will return £190m to investors. Stelios will be high on that news...

by Dave Waller
Last Updated: 25 Jun 2012
Low-cost airline Easyjet has increased its estimate for full-year profits - helped by an increase in business travellers, which bolstered city routes. It’s had a 20% increase in custom from the suits, which the company puts down to a shift in strategy. Of course it could also be down to the fact that other businesses can no longer justify indulging in high-end business-class opulence, and instead insist their people put up with the tacky merchandise flogging of an easyJet flight like everyone else.

Of course easyJet won’t care about the reasons: it’ll just be happy that its revised forecast of £240m-£250m is up from July’s forecast of £200m-£230m. Revenue per seat rose 6% in the second half of the year - at the upper end of its expectations - and it’s already sold around a third of the seats for the first quarter of its next fiscal year.

EasyJet said it will pay a special dividend of 35p a share (which works out at £150m in total), on top of an annual dividend of 9p a share (£40m). That’s going to be good news for Stelios. The company founder and largest shareholder has a 38% stake, and has been banging on for a while about the need to reward shareholders with a special dividend, rather than expand its fleet. The board will be hoping that now he’s got his wish on that he’ll stop sticking his nose in to company affairs, his latest meddling being the campaign to remove non-exec Rigas Doganis from the board

So easyJet looks fairly well set up for the year ahead. Still, it may wish to think twice before handing out that loot too freely: the budget carrier needs all the cash it can get. Chief exec Carolyn McCall is already warning that it’s flying into a ‘cost headwind’ – a fuel bill for next year that’s set to be £220m higher than in 2011.

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