A rise in easyJet’s quarterly revenues to £897million failed to inspire the City today as the budget airline posted its first trading update since notching up an annual profits increase of 51%.

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Shares in easyJet slipped in early trading despite the 7.7% increase in turnover for the three months to the end of December, as one analyst said the figures “did not quite match the great expectations to which investors have become accustomed”.

The number of passengers carried increased by 4.2% to 14.3million, with business passengers up by 8.9%. Revenue per seat was up by 3.4% as expected to £55.71, despite tough comparisons with a post-Olympics getaway surge in 2012.

But bookings for the first half are expected to be flat on the year before and pre-tax losses for the six-month period are forecast to increase to between £70m and £90m because of the timing of Easter.

The group said tough competition together with restrictions on travel to Egypt had also taken their toll on performance. There were also higher costs from airport charges and maintenance.

But it was helped by the closure of underperforming routes, changes to fees and charges and the performance of allocated seating, as well as improvements to the website and an increase in non-seat revenue by 8p to 88p per passenger.

The group said it had sold 15% of seats for the second half of the financial year, in line with the year before. It was still too early to give guidance on expected profits for the period.

Chief executive Carolyn McCall said: “Easyjet has made a good start to the year. We have delivered revenue per seat growth in the quarter against a challenging competitive environment and the tough comparison with the previous year.”

The airline is to begin operations from a new base at Naples in the spring. New routes from Hamburg and Rome Fiumicino have also recently been announced.

It is also looking to connect more airports in its network and has said it will increase the number of routes to Tel Aviv.

Annual profits at the carrier soared by half to £478m for the year to the end of September but analysts expect this growth to slow in the current year.

Cantor Fitzgerald’s Robin Byde said the latest trading statement was solid but that expectations of easyJet’s first half performance meant the stock’s valuation was “no longer compelling”.

Shares, which have more than doubled in value over the last year, were down 2% following the announcement.

Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said: “The update does not quite match the great expectations to which investors have become accustomed. The fact remains, however, that easyJet has been a stunning success story.”

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