Sky-high figures, but don't call it easy

The dividend has not downed the dogfight between Sir Stelios and easyJet's board

Having slain one dragon in the form of easyJet's previous chief executive, you'd think Stelios Haji-Ioannou would be happy with the pot of gold he's received. Buoyed by a princely looking set of results, the low-cost airline is giving £195m back to its shareholders, in the form of its first regular dividend plus a £150m special payout.

Sir Stelios and his family control38 per cent of easyJet's shares, so they have a £74.1m windfall coming to them.

Plans to expand the company's fleet – much criticised by Sir Stelios – have also been scaled back from the 7 per cent a year once mooted by Andy Harrison, who may be happily raising a glass at one of the pubs run by his new company Whitbread now he's clear of the mess. The company's 204-strong fleet is up by about 4 per cent on last year and easyJet says it will stay at this level, although only for the next year or so.

And yesterday, its results won a warm reception from the City with pre-tax profits for the year to 30 September up by 61 per cent to £248m, despite a £100m rise in unit fuel costs, on revenues of £3.45bn, up 16 per cent. Strip out one-offs such as the disruption caused by Icelandic volcanoes in 2010, and underlying profits are still up 32 per cent.

"Despite the headwinds of higher fuel costs and a weak and uncertain economic outlook, our focus on customers, robust operational performance, the strength of easyJet's network combined with cost control and capital discipline means that easyJet is well placed to succeed," says Mr Harrison's replacement Carolyn McCall.

EasyJet would much prefer to talk about this, its increasing number of business customers and its trialling of seat allocation for the first time, following a similar move by Ryanair, than Sir Stelios. The company will not publicly speak about "individual shareholders" (unless its chairman Sir Michael Rake is writing another furious letter to investors in response to Sir Stelios). But he's clearly a very touchy subject. It also insists the dividend move and scaling back of its plans follows consultations with all shareholders.

However, it is Sir Stelios who has led the charge. And while Ms McCall, spirited away from the loss-making Guardian Media Group, appears to have sought to meet Sir Stelios half way, it clearly hasn't worked.

Sir Stelios was at it again yesterday, producing a lengthy analysis of why easyJet is, in his view, failing and warning he will not support the re-election of directors at the 2012 AGM. He accuses the company of implementing plans that will "destroy shareholder value" and argues directors are paid too much.

Should the company have anyway bowed to the pressure from Sir Stelios? Howard Wheeldon, a senior strategist at BGC Partners, says: "Rightly, easyJet CEO Carolyn McCall needs to be conciliatory in her dealings with Stelios just as she must with all major shareholders. But she is the person on the board and she has the overall responsibility of looking after all shareholders' interests." He adds: "That easyJet is now paying a dividend may in part reflect a more conciliatory approach from the easyJet board, but great care should always be taken to ensure that a single shareholder, no matter what the size of their holding, should not disrupt a well-defined and agreed strategy put in place for the potential benefit of all others."

Doug McNeil, a transport analyst at stockbroker Charles Stanley, thinks the payment of the dividend should actually be viewed as "a major step forward", pointing out that for any airline to be paying anything to its investors is very rare. As for demanding more, and calling for an end to fleet expansion, he says Sir Stelios is within his rights to ask. But the board is within its rights to say no.

"Clearly [Sir Stelios] is on course to receive a handsome sum but he's within his rights to argue for more. That's a judgement for him to make," says Mr McNeil.

As for the ongoing undeclared war between Sir Stelios and the company he founded, Mr McNeil is reasonably sanguine, with one caveat. "I think there was a time when the ongoing disagreement was unnerving to investors but now it's more of a given that he has these objections. The board's position is well known and it only becomes a problem if it results in the departure of key management. You don't want to be losing talented people, but there is no sign of that at the moment."

Perhaps the real problem for Sir Stelios is that having taken his company public he now finds that he has had to surrender control, a bitter pill for many entrepreneurs to swallow.

In September, he said that he planned to set up a new airline, Fastjet. That could mire both sides in a legal battle if the new airline competes directly with easyJet in Europe. Meanwhile, until and unless Ms McCall and Sir Michael open up the treasure chest and stop all talk of fleet expansion, it's going to be daggers drawn between the company and its biggest investor.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

Guru Careers: C# Project Team Lead

£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

Guru Careers: Graduate Editor / Editorial Assistant

£16 - 20k: Guru Careers: A Graduate Editor / Editorial Assistant is needed to ...

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine