EasyJet flags £28m profit hit amid EU vote uncertainty

The fallout from Brexit gathered pace yesterday with shares in a leading budget airline and high-end estate agent both hammered after profits warnings partly attributed to the UK vote to leave the European Union.

EasyJet has suffered 'extremely challenging' trading conditions. Picture: Ian Georgeson

Shares in EasyJet and Foxtons fell more than 20 per cent on the warnings, which further jolted investors following a volatile stock market session on Friday after the previous day’s historic EU referendum.

EasyJet said it will take a £28 million hit following two months of turbulence and warned that Brexit would have a negative impact on the airline.

The group cited strikes in France in May and June and severe weather and congestion issues at Gatwick leading to more than a thousand cancellations, with the EgyptAir tragedy also denting demand.

EasyJet said: “The operating environment for all European airlines in May and June has been extremely challenging. These incidents, together with the EgyptAir tragedy, resulted in some drop off in consumer demand leading to lower yield and have impacted third quarter profit before tax by approximately £28m and have had a negative impact on third quarter revenue per seat.”

On Brexit, the carrier said that it anticipated economic and consumer uncertainty this summer and, as a result, revenue in the second half will be down by “at least a mid-single digit percentage”.

It added: “In addition, recent movements in fuel prices and exchange rates are now expected to add around £25m of additional cost in the year to that guided at the half-year results. In response, EasyJet is continuing its efforts to drive ex-fuel cost savings.”

The airline said it would give more details on current trading when it announces its third-quarter results on 21 July.

Shares in London-focused estate agent Foxtons also plummeted after it also blamed Brexit for a profit warning.

Foxtons said that the upturn it had expected in the second half of the year is “now unlikely to materialise”, adding that annual earnings will be “significantly lower” than in 2015.

Chief executive Nic Budden said: “Whilst we had a strong start to the year, we said in our first quarter update that we expected the first half to be challenging ahead of the EU referendum.

“Since then recent sales volumes have been slow as uncertainty and higher stamp duty has led many buyers and sellers to sit on their hands.

“The result of the referendum has increased uncertainty and is likely to mean that these trends continue.”

However, in the longer term Budden said that Foxtons remains confident of the “attractiveness of London property sales markets” and its strategy to focus on the outer London mid-market segment.

EasyJet’s shares closed down 22.3 per cent at 1,020p, while Foxtons ended the day 22.6 per cent lower at 104.5p.