The Week In Review: EasyJet still on an upward flight path

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The Independent Online

Passenger numbers at EasyJet broke through the 3 million barrier during March, representing a 12 per cent increase on a year earlier.

Put simply, business at the no-frills airline is booming. In its last financial year, EasyJet made a pre-tax profit of £129m. City analysts expect this figure to soar to around £194m in the current year and to £256m in 2008.

Even the fresh jump in the oil price - which will increase the airline's fuel bill - is unlikely to stop the progress. Although EasyJet has promised not to pass on these higher costs to travellers in the form of fuel surcharges, it should continue to enjoy steady profit growth thanks to measures to control the rest of its cost base and by making money from ancillary services such as insurance, hotels and car hire. The European no-frills airline industry is growing at 15 to 20 per cent per annum, which will also help matters. The shares have more than doubled since this column tipped them 12 months ago, and they remain a good long-term bet.

YOUGOV

YouGov, the polling and market research group, has shown astonishing growth since it was founded less than seven years ago. The co-founder and chief executive Nadhim Zahawi believes the organisation can go on to become one of the "giants" of the industry. As a relative minnow for now, it is easy to see plenty of growth ahead - the market is worth some £1.2bn in the UK alone. Buy

ASCENT RESOURCES

The oil and gas explorer Ascent Resources looks for oil in continental Europe, eliminating the political risk that most exploration companies carry by drilling in developing countries. The group has so far been drilling three wells, two of which have already produced discoveries - gas in Hungary and oil in Italy. Investors should not be surprised by more upbeat news from Ascent in the coming months. Buy.

ST IVES

Profits at St Ives, the graphic designer and printers, fell from £14.2m to £10.7m during the first half, driven by turmoil in the music sector. The group supplies printed sleeves for record labels and the sharp drop in CD sales has hurt the group. But the company expects an improved second half. St Ives also prints books for publishing houses such as Penguin, where demand remains solid. One to hold.

XSTRATA

The mining company Xstrata sold its aluminium operation for $1.5bn (£759m) this week - the company's first major disposal. It says it will use the proceeds to help fund acquisitions. With metal prices rallying again, analysts believe Xstrata is in a better position than most of its rivals to benefit from the bullish mood. There is scope for significant upgrades to its earnings forecasts. Buy.

OCZ TECHNOLOGY

OCZ Technology is a specialist in high-performance computer memory products. It reported a 90 per cent increase in annual sales to this week and though it registered a loss, it should be back in the black by the end of the current year. Buy.

SSL INTERNATIONAL

Takeover rumours have driven up the shares of condom maker SSL. However, its valuation is now a little steep. Only concrete news of a bid approach will help move the shares higher. Now is a good time for investors to take profits.

PREZZO

The restaurant chain Prezzo has expanded rapidly since its flotation in 2002, and is now the subject of takeover speculation. Regardless of whether a bid materialises, Prezzo investors should continue to profit. The restaurant boom shows no signs of slowing and with the casual dining market the fastest grower, it's a buy.

HOT TUNA

Shares in Hot Tuna, the surf brand, have been far from hot recently. However, things are looking up. It has secured orders from two leading clothing retailers, which should put some life back into the brand. With a largely fixed cost base, these deals could become very profitable. The shares are worth a punt.

The recommendations above are taken from the daily Investment Column.

m.jivkov@independent.co.uk

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