easyJet pre-close statement ups expected profit

easyJet’s Board has announced that it now expects profit before tax for the year ending 30 September 2011 to be between £240 million and £250 million compared with its previous expectation of £200 million to £230 million.

easyJet says its commercial performance continues to be robust across the network, with particular strength on city routes used by business and short break leisure travellers. The increase in total revenue per seat at constant currency for the second half of the year is expected to be towards the upper end of the Board’s expectations at around 6% and for the full year will be around 3%.

The new profit estimate equates to a ROCE of approximately 12%. The net cash flow from operations improved and the net cash at the year end is expected to be between £50 million and £100 million with gearing of approximately 30%.

Following a policy announced in November 2010, the easyJet Board says it expects to pay an ordinary dividend of five times cover of approximately £40 million (or 9 pence per share) for the year ending 30 September 2011.

The Board said at the time of easyJet’s third quarter IMS in July 2011, that it would look again at the end of the year at the balance sheet, trading outlook and cash position to determine whether or not there should be a return in excess of the targeted dividend policy of five times cover.

Because of the strong performance over the past 12 months, the management’s current medium term expectations for easyJet’s financial potential, and a prudent approach to maintaining balance sheet strength, the Board expects to recommend a one-off return of capital likely to be structured as a special dividend of £150 million.

Taken together this provides an estimated total cash return to shareholders for the year of approximately £190 million or 44 pence per share. The annual dividend and the one-off return are scheduled to be declared when the confirmed full year results are announced in November and paid in the early part of calendar year 2012.

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