Impressive full-year results from low-cost carrier EasyJet (EZJ) see the Luton-based airline rise 8.2% to £13.59 on the back of 50.9% rise in pre-tax profit. The sweetener is a 44.1p per share special dividend on top of its regular dividend which is 33.5p per share.
Clearing £478 million pre-tax profit on turnover of £4.3 billion, EasyJet saw pre-tax margins stretch out to 11.2%; up from the previous year's 8.2%.
With total revenue per seat rising 7% to £62.58, EasyJet's disciplined balancing act in terms adding capacity has seen the airline increase profit before tax per seat by £2.22 year-on-year to £7.03.
Trading in the new financial year remains strong as evidenced by passenger numbers rising 5.4% in October (with load factor up 0.7%) compared to rolling 12-month passenger numbers up 4%.
The airline is trying to manage expectations and the likelihood of similar profit hikes in 2014 looks slim.
Analyst Robin Byde at Cantor Fitzgerald has played down consensus expectations for full-year 2014, saying its fuel bill will be £20 million to £30 million higher in the fourth quarter of the calendar year 2014 and foreign exchange headwinds will add £10 million to costs.
EasyJet remains a 'buy' for Investec analyst James Hollins who maintains that despite the airline facing tougher competition in the first half of the calendar year as a result of increased capacity, 'the group continues to compete with a strong brand, product and price-point on key routes served by legacy network carriers that are delivering practically zero additional capacity. This should ensure further EasyJet yield, earnings, free cash flow and dividend growth.'