EasyJet 2011 Annual Report Download - page 11

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easyJet plc
Annual report
and accounts 2011
09
Overview Performance and risk Corporate responsibility Governance Accounts & other information
Business review
Chief Executive’s introduction
Introduction
easyJet has made strong progress this year in the
execution of its strategy. Our strong operational and
financial performance is a result of the hard work and
commitment of easyJet’s people to make travel easy
and affordable for customers. The business has
strengthened despite the headwinds of fuel costs,
rising aviation taxes and a weak economy. The
management team has introduced an enhanced focus
on financial discipline, financial return and operational
performance and constantly takes a rigorous look at
the Company’s network and profitability.
Financial performance
easyJet delivered record profit before tax of £248
million up by £60 million from an underlying profit of
£188 million in 2010 despite a £100 million increase in
unit fuel costs. Underlying profit per seat (including fuel,
adjusting for last year’s volcano effect and loss on
disposal of A321 aircraft) rose by 61 pence to £3.97.
Thisstrong performance was driven by:
– Passenger numbers rose 11.8% to 54.5 million and
loadfactor improved by 0.3 percentage points to
87.3%. Passengers originating outside of the UK now
account for 56%, an increase of 3 percentage points
compared to the prior year. Passengers travelling
with easyJet on business increased by almost
onemillion to 9.5 million
– Total revenue per seat up 4.1% (3.4% on a constant
currency basis) to £55.27 as capacity investments
made in 2010 and the first half of 2011 matured,
combined with a strong performance from ancillary
revenue up 12.9% to £11.52 per seat following decisive
management action in the second quarter
– Underlying cost per seat (excluding fuel and currency
movement) fell by 1.3% for the full year and was flat
on a reported basis with strong performances in
ground handling, maintenance and disruption related
costs
easyJet delivered ROCE of 12.7% in the year and
generated cash from operations of £424 million
resulting in net cash as at 30 September 2011 of
£100 million.
Carolyn McCall OBE
Chief Executive
Returns to shareholders
In light of the strong performance of the business over
the past 12 months, management’s current medium–
term expectations for easyJet’s financial performance
and a prudent approach to maintaining balance sheet
strength, the Board has recommended a one-off
return to shareholders, structured as a special dividend,
of £150 million or 34.9 per share. Taken together with
the ordinary dividend of 10.5 pence per share this
provides an estimated total cash return to shareholders
for the year of £195 million or 45.4 pence per share to
be paid on 23 March 2012 to those shareholders on the
register at the close of business on 2 March 2012 with
an ex dividend date of 29 February 2012. The special
dividend will be accompanied by an associated share
consolidation. The consolidation factor will be
announced in due course.
Operational performance
Investment in operational robustness has delivered a
strong improvement in easyJet’s On Time Performance
(OTP) with a 13 percentage point improvement across
the network across the year with an increase of 25% in
the fourth quarter and our performance is now in line
or ahead of our key competitors.
OTP % arrivals within 15 minutes
Q1 Q2 Q3 Q4 Full year
2010 75% 66% 64% 60% 66%
2011 65% 81% 84% 85% 79%
The focus of the operations team in the coming
financial year will be on maintaining the current
performance whilst at the same time reducing cost
through standardisation and simplification.