easyJet profits fuelled by increased margins, passenger numbers

easyJet has delivered forecast-beating record profits boosted by higher margins and increased passenger numbers.

For the year ending September 30th, the budget airline increased total revenues 11.6% to £3.85bn (2011: £3.45bn). Pre-tax profits soared 27.9% to a record £317m (2011: £248m) and pre-tax profit margins grew one percentage point to 8.2%, despite a £182m increase in unit fuel costs.

Analysts had expected earnings of £314m.

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This outperformance was driven by a 5.5% capacity growth and a 1.4 percentage-point improvement in load factor to 88.7%. Passenger numbers rose 7.1% to 58.4m.

Total revenue per seat grew by 5.9% (7.5% at constant currency) to £58.51, driven by improved load factors; the annualisation of changes to fees and charges made in 2011; the careful targeting of capacity to markets with the strongest returns potential; improvements to easyJet.com; the success of the 'Europe by easyJet' campaign and from competitor capacity constraint in the market.

The company has decided to reduce the level of dividend cover from five times to three times and consequently it proposes to increase the dividend from 10.5p to 21.5p for the year ended September 2012.

Earnings per share grew 19% to 62.5p.

CM