EasyJet 2013 Annual Report Download - page 19
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www.easyJet.com
Strategic report
Disciplined use of capital
easyJet allocates its aircraft and capacity to
optimise the returns across its network. easyJet
discontinued 41 routes during the financial year
including Liverpool to Brussels, Amsterdam to
Barcelona and Brest to Paris Charles de Gaulle. The
Madrid base closure was implemented efficiently
and the withdrawn capacity was allocated to routes
which have the potential to drive higher returns.
easyJet maintains a strong balance sheet and
low gearing and derives a competitive advantage
through access to funding at a lower cost. Over
the cycle, easyJet is committed to earning returns
in excess of its cost of capital, and intends to fund
both aircraft purchases and dividends from the
cash generated from the business.
easyJet has the following targets to ensure its
capital structure remains both robust and efficient:
• a maximum gearing of 50%, giving investors and
finance providers assurance that easyJet will not
over-leverage;
• a limit of £10 million net debt per aircraft; and
• a target of £4 million liquidity per aircraft.
These measures allow easyJet to withstand external
shocks such as an extended closure of airspace,
significant fuel price increases or a sustained period
of low yields whilst being in a position to drive
growth and returns for shareholders.
As at 30 September 2013, easyJet had cash
and money market deposits of £1,237 million, an
increase of £354 million on 30 September 2012
and net cash of £558 million against net debt of
£74 million at the same period last year. Adjusted
net debt, including leases at seven times at
30 September 2013 was £156 million against
£739 million at 30 September 2012.
easyJet is focused on driving returns for shareholders
and, consistent with this focus, the Board considers
returns in addition to its ordinary dividend based
on three times cover to reduce excess capital.
easyJet finished the year with a strong balance
sheet and a low level of gearing and therefore the
Board is recommending a return to shareholders
of £308 million or 77.6 pence per share which will
be in the form of a special dividend of £175 million
or 44.1 pence per share and the regular ordinary
dividend paid at three times cover of £133 million
or 33.5 pence per share. The ordinary and special
dividend are subject to shareholder approval at the
Company’s AGM on 13 February 2014. The ordinary
and special dividends will be paid on 21 March 2014
to shareholders on the register at close of business
on 28 February 2014.
£308m
proposed dividends
(2012: £85m)
(8) Source: customer satisfaction from Millward Brown and GfK.
(9) Source: google analytics.
(10) Source: internal easyJet definition based on booking algorithm.
(11) Source: Business travel market share from PhoCusWright report.