Profit after tax grew 10 per cent to €596m (£477m) despite the recession, fierce competition, higher airport charges and fuel bill of over €1.1bn. The introduction of reserved seating helped - sales of ancillary products leapt by a fifth to €583.8m. True, the traditionally quiet winter months limit visibility, but traffic is expected to increase by 4 per cent this year to over 79m passengers and net income to somewhere between €490m and €520m. That gives Ryanair about 12 per cent of Europe's short-haul market, but chief executive Michael O’Leary wants 18 per cent, or 120m passengers, within 10 years.
The target may look ambitious, but its costs per passenger are much lower than others, while rivals are going bust and legacy carriers such as IAG are cutting short-haul operations. A 'radical' package of remedies should increase Ryanair's chances of getting EU competition approval for its Aer Lingus bid, too, and record cash reserves of €3.9bn make more special dividends likely - a €0.34 a share one-off will be paid at the end of this month.
Broker Investec Securities expects adjusted pre-tax profit of €563.4m for the full year, giving adjusted EPS of 34.7¢ (from €557.3m and 33.4¢ in 2012).
|ORD PRICE:||€4.87||MARKET VALUE:||€7.02bn|
|TOUCH:||€4.86-4.87||12-MONTH HIGH:||€4.98||Low: €3.43|
|DIVIDEND YIELD:||nil*||PE RATIO:||11|
|NET ASSET VALUE:||260¢||NET CASH:||€249.5m|
|Half-year to 30 Sep||Turnover (€bn)||Pre-tax profit (€m)||Earnings per share (¢)||Dividend per share (¢)|
*Does not include special dividends
Ryanair's results are impressive so, despite a tricky winter ahead and forward PE ratio of 14, we rate the shares a hold.
Last IC view: Hold, €3.94, 21 May 2012