Travel and leisure companies easyJet (LON: EZJ) (EZJ.L) and Whitbread (LON: WTB) (WTB.L) have experienced relatively volatile share price performances over the past year. In the past month, they have both released financial updates.
easyJet released a trading update for the first six months of the year on 14 April. It expects its headline loss before tax to be between £690 million and £730 million. This is better than its own previous expectations.
Revenue for the six months was 90% lower than the same period of the previous year at £235 million. This was due to a decline in passenger numbers of 89%, as lockdown measures had a negative impact on the wider sector. By contrast, the company’s cash burn was better than guidance for the period. It was able to reduce headline costs excluding fuel by 59%. This was driven by a decrease in capacity flown and the savings achieved from its cost-out programme.
Since the start of the pandemic easyJet has raised over £5.5 billion in liquidity. As at 31 March it had access to £2.9 billion of liquidity. It will continue to assess its liquidity position and consider further funding opportunities, according to its update.
The company expects to fly up to 20% of 2019 capacity levels in the third quarter. It anticipates that capacity levels will start to increase from late May onwards. As a result, it is not providing financial guidance for the 2021 financial year.
In addition to its trading update, there were relatively small director dealings in the company’s shares in the past month. They were part of a share incentive plan. In the past year and five years, the easyJet share price has risen by 80% and declined by 30%, respectively. It is next due to update the stock market on 20 May with the release of its first-half results.
Fellow travel and leisure company Whitbread has also released news regarding its share price in the past month. On 27 April it announced its preliminary results. Covid-19 had a significant impact on its performance, with sales falling over 71% versus the prior year.
However, the FTSE 100 company has outperformed the midscale and economy hotel market since reopening in the UK in August. Meanwhile, in Germany it accelerated the growth of its hotel network, with a total and committed pipeline now standing at 72 hotels.
The firm expects to invest in excess of £350 million in the course of the new financial year. This includes marketing programmes and room refurbishments conducted on a disciplined basis. It will also target a cost reduction of £100 million by 2024. It is looking ahead to a planned reopening of its hotels to leisure guests on 17 May, as well as the reopening of its restaurants. It maintains its aim to become the number one budget hotel in Germany over the long run.
Alongside its preliminary results, Whitbread announced relatively small director dealings under a share awards plan. The Whitbread share price is up 25% in the past year, while it is flat over the last five years. There are no upcoming investor releases scheduled according to its financial calendar.
Not Investment Advice
Note: Views expressed are those of the writer. The author does not own any stocks mentioned. The article is information, not advice. Share prices can rise and fall. Past returns are not a guide to the future. Please do your own research.