18th November 2014
Shares in easyjet tumbled 2% this morning despite the discount carrier reporting a 21.5% rise in its annual profits.
On the back of better passenger numbers, pre-tax profits at the no-frills airline jumped to £581m for the 12 months to end up of September, up from £478 in the previous year. In a statement, the business said that seats flown grew by 5.1% to 71.5m over the period.
But by 8:58am, stock in the FTSE 100 firm had fallen 2%, or 29p to 1,515p as traders banked some profits, given the shares are up by 20% in the past three months alone, and by 22% over the last year.
However the analyst consensus, according to share data hub Digital Look, is that the stock is a ‘buy’, and brokers at Cantor Fitzgerald and Nomura have both just reiterated upbeat comments on the airline.
Commenting on the results, Carolyn McCall easyJet chief executive said the group had continued to execute its strategy, delivering another strong performance “enabling easyJet to deliver record profits for the fourth year in a row” and that the group “has opened up clear blue sky” between itself and its competitors.
She added: “Our performance demonstrates our continued focus on cost and progress against every strategic revenue priority. Our people are fully aligned behind our strategy and this gives us strong momentum to continue delivering.”
Ian Forrest, investment research analyst at The Share Centre recommends investors ‘hold’ easyjet. Looking at the latest market update, he said: “These results show the company is making steady progress with good growth in its earnings and dividends. Whilst capacity is being built up, the airline sector remains very competitive. Some costs are also rising and the deteriorating outlook for economic growth in the Eurozone may hamper growth in the short to medium term.”