EasyJet PLC (LON:EZY) has been navigating through a turbulent time for airlines with tough competition, recent terror attacks and a rising oil price.
Still, the budget airline said in a trading update in October that it expects profits for the year to be at the high end of its forecasts following a strong performance over summer.
The company, which reports its full year results on Tuesday, has guided to profits of between £405-410mln, compared to £495mln last year, amid higher costs and pricing pressures facing the industry.
Budget airlines have been responding to fierce competition by cutting fare prices. This cut EasyJet’s revenue per seat by 1.4% over the second half and by 3.7% in the fourth quarter. EasyJet also took a £100mln currency hit during the final three months of the year.
Overcapacity has prompted the company to increase the number of available seats, which combined with cutting fares, have hit profit margins.
UBS predicts revenue to rise to £4.8bn from £3.6bn and pre-tax profits to reach £407mln.
Post-period, EasyJet in October agreed to buy some assets at Berlin Tegel Airport from the insolvent Air Berlin for €40mln. Investors will be keen to hear more about the benefits of the deal, which is expected to close in December.
New chief executive Johan Lundgren will begin on 1 December, replacing Carolyn McCall, who is leaving to join ITV as its boss.
Will Kingfisher turnaround begin to bear fruit?
B&Q owner Kingfisher Plc (LON:KGF) is expected to update the market on its ongoing restructuring when it publishes its trading statement.
The company’s turnaround efforts under chief executive Veronique Laury resulted in some empty shelves and heavy discounting of old stock in the first half, dragging profits and like-for-like sales lower.
Ahead of the announcement, RBC Capital Markets upgraded the stock to ‘sector perform’ from ‘underperform’ and raised its price target to 325p from 300p, saying it believes the company is now “better positioned versus the sector”.
RBC said Kingfisher will benefit from a broadening housing recovery in France, where the Castorama DIY retail stores are based, along with plans to upgrade its e-commerce offering in the nation.
A continued strong performance in UK trade tools retailer, Screwfix, and its Poland business also put the company ahead of the rest.
“We still see risks to big ticket spend in the UK and execution risk with its unified offer strategy, but further cost savings should support the P&L (profit and loss statement) and valuation is now less demanding,” RBC said in a note dated 17 November.
Significant events due:
Finals: Compass Group (LON:CPG), CYBG (LON:CPG), easyJet (LON:EZJ), Renew Holdings (LON:RNWH), Stride Gaming (LON:STR), Focusrite (LON:TUNE), Utilitywise (LON:UTW)
Interims: AO World (LON:AO.), Big Yellow Group (LON:BYG), CML Microsystems (LON:CML), Halma(LON:HLMA), Homeserve (LON:HSV), IMImobile (LON:IMO), Johnson Matthey (LON:JMAT), Scapa Group (LON:SCPA), Severfield (LON:SFR), Solid State (LON:SOLI), Telecom Plus (LON:TEP), VP (LON:VP.), Babcock International Group (LON:BAB)
Trading statements: Intertek Group (LON:ITRK), Kingfisher (LON:KGF), AFI Development (LON:AFRB), SIG (LON:SHI), Frutarom Industries Ltd GDR (LON:FRUT)
Economic events: UK public finances