easyJet posts record annual profits, doubles dividend

EasyJet reported record annual profits on Tuesday as robust sales and deep cost-cutting offset high fuel costs, enabling the British no-frills airline to return one third of its net earnings to shareholders.

Profit after tax advanced 13 percent to £255 million ($405 million, 317 million euros) in the group's financial year to the end of September, compared with earnings in 2010/11, easyJet said in a results statement.

Pre-tax profit jumped almost 28 percent to £317 million, in line with the company's guidance. Both the net and pre-tax figures were record-high amounts, according to a group spokesman.

Passenger numbers rose seven percent to 58 million people, but the fuel bill soared by an extra £182 million as a result of high crude oil prices. Kerosene, or jet fuel, is refined from crude.

EasyJet doubled its shareholder dividend to 21.5 pence a share -- returning £85 million to investors. In response, the group's share price jumped more than five percent on the London stock market.

"These results demonstrate that easyJet is a structural winner in the European short-haul market against both legacy and low cost competition," chief executive Carolyn McCall said in the statement.

"The strength of easyJet's business model and strategy coupled with the hard work and dedication of the easyJet team has delivered record profits as well as a significant increase in returns for shareholders during the year.

"As evidence of its confidence in easyJet's current position and future prospects the board proposes to increase the dividend."

In addition, McCall expressed confidence over the future outlook for the airline.

"Whilst there is always the potential for unexpected events to temporarily impact financial results the board of easyJet is confident that its business model, strategy and people will consistently continue to generate superior returns and growth for shareholders," she added.

The airline, which is based in Luton north of London, also revealed that it had benefited from "exceptionally low levels" of disruption from weather and strike action, compared with previous years.

Investors welcomed the record profits and dividend news, sending easyJet's share price surging 5.13 percent to 686 pence on London's second-tier FTSE 250 index, which was 0.35 percent higher at 11,785.61 points in midday deals.

"easyJet gave shareholders plenty to smile about," noted analyst Alastair McCaig at trading group IG.

EasyJet's fierce rival Ryanair earlier this month announced a 10-percent rise in interim net profits, boosted by rising revenues and passenger numbers, while the Irish carrier also lifted its annual earnings forecast on the brighter outlook.

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