Central and Eastern European low-cost airline Wizz Air (WIZZ) is reporting strong growth across all the metrics that matter with management attributing strong performance to capacity expansion, passenger growth and continued improvements to its low cost base.
The budget carrier posted a 53% hike in underlying net profit to €224 million in the year to 31 March.
That the news barely touched the shares, roughly flat at £19.83, perhaps says more about the stocks recent rally than it does about today's news. The shares have risen nearly 8% in the past month, close on 37% over the last year.
Growing customer demand and an ongoing low-fuel price environment mean that Wizz remains bullish about its prospects for the coming year. Turnover for the year to March increased by 16% to €1,429 million with the final quarter still showing revenue growth of 20% on the back of strong capacity and load factor growth.
The positive outlook for Wizz is further supported by its continued expansion throughout the EU and beyond. 2016 saw Wizz add 69 new routes and four new operating bases as well as the announcement of a further three. Management currently expects a further significant rise in the group's underlying net profit over 2016 to a range of between €245 million and €255 million.
Further expansion is certainly within the scope of Wizz Air's balance sheet. Free cash of €646 million and a net debt to EBITDA ratio of 1.4-times means that plans for further aircraft purchases will be well supported.
