Preliminary results for the 12 months to 30 September 2007
RECORD PRE-TAX PROFIT UP 56% TO £202 MILLION
* Record pre-tax profit of £201.9m, including a £10.6m one-off benefit of reinstating easyJet’s investment in The Airline Group
* Underlying 1 profit before tax increased 48% to £191.3m and underlying* earnings per share increased 50% to 34.8p
* Passenger numbers up 13% to 37.2m with consistently high load factors averaging 84%
* Total revenue increased 11% to £1,797.2m
* Ancillary revenue increased by 30% to £171.2m, a 47p increase per seat
* Unit operating costs (excluding fuel) reduced 6.4% or £1.81 per seat to £26.55 per seat
* Underlying 1 return on equity increased by 3.5pp from 10.1% to 13.6%
* 8 new destinations and 46 routes added, expanding the network to 289 routes through 77 airports in 21 countries
* European expansion continued with the opening of our 17th base in Madrid and a successful first full year of operation at Milan Malpensa
* Delivery of 100th Airbus A319 in April 2007, bringing total fleet to 137 aircraft with average age of just 2.7 years. One of the most modern and environmentally efficient fleets in Europe
* Agreement to acquire GB Airways announced in October to expand presence at London Gatwick Airport
Commenting on the results, Andy Harrison, easyJet Chief Executive said:
“This is yet another year of record profit at easyJet which underlines the strength of our business model. Despite challenging conditions, revenue, profit and return on equity have all shown strong improvements reflecting the success of our focus on low cost with care and convenience.
“At the same time as driving the financial performance of the business, our now well established management has also expanded easyJet’s network and fleet, which carried over 37 million passengers in the year, making the airline the fourth largest in Europe.”
During 2007 we continued to expand our network in mainland Europe with the launch of our 17th base in Madrid where we carried over 2 million passengers during the year, making easyJet Madrid’s number one low-fares airline. We continued to expand our Milan Malpensa base, where we have become the second largest carrier only one year after the launch of the base and we have agreed to double our capacity to 15 aircraft by the end of 2008.
In the UK we continue to expand our bases, adding two A319s at Gatwick, one at Bristol and increasing our presence at Belfast International to six aircraft. Following the year end we announced the launch of two additional bases in France in spring 2008, at Paris Charles de Gaulle and Lyon.
We continue to innovate at easyJet. In June 2007 we launched easyJetHolidays.com which allows our customers to purchase an integrated flight and hotel package. To supplement our development of the business traveller market, we announced post year end a unique partnership with Amadeus and Galileo. For the first time this allows corporate travel agents access to easyJet via the Global Distribution System (“GDS”). All costs are borne by the user which makes it completely compatible with the low-cost model.
Looking forward, for this winter we expect total revenue per seat to be broadly in line with last winter. For summer 2008 we expect the effect of annualising APD, checked bag charges and growing ancillary revenues to result in total revenue per seat being ahead of the previous summer. High fuel costs will be partly offset by the weak US Dollar however we anticipate an overall increase in Sterling unit fuel costs. Unit costs excluding fuel are anticipated to be similar to last year. The fuel environment remains challenging; however, we believe the easyJet business model is resilient and well positioned for success. Over the past two years we have significantly increased profitability and in the current financial year the Board anticipates an increase in underlying profit before tax of around 20%.
The above outlook excludes the proposed acquisition of GB Airways. We anticipate the acquisition to complete no later than 31 January 2008. Excluding one-off costs of around £12m we expect the acquisition to be earnings enhancing in the current financial year.
1Underlying financial performance excludes the effects of the reversal of the impairment of the Group’s investment in The Airline Group of £10.6m.