Shares in Ryanair (RYA) took off after the low-cost carrier reported that net profit in the first half rose by a third to €795m (£620m). The favourable timing of Easter flattered the figures, but the company also attributed bumper trading to the success of its plan to improve its notorious customer experience and offer a wider range of options, such as Family Extra and Business Plus tickets and allocated seating.
Traffic rose 4 per cent, despite a 5 per cent increase in average fares, pushing capacity up 4 percentage points to 89 per cent. Unit costs also dipped 2 per cent, thanks to a slump in oil prices; excluding fuel they rose 3 per cent. Costs are set to fall further following the order of 200 ultra fuel-efficient Boeing 737-MAX aircrafts, which offer eight extra seats and more leg room, although delivery will only start in 2019. The company's geographical expansion continued, too, with four new bases and 57 routes.
Forward bookings for the winter season are running 5 per cent ahead of last year, which prompted management to raise full-year net profit guidance from €650-€750m to €770m. However, chief executive Michael O'Leary warned that "extreme caution" should underpin any medium-term forecasts, given the limited visibility for the fourth quarter.
Broker Investec Securities has placed its net profit forecasts under review, but says consensus for net income is likely to move up by 11 per cent to €760m, giving EPS of 55¢.
| RYANAIR (RYA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 828¢ | MARKET VALUE: | €11.5bn | |
| TOUCH: | 827-828¢ | 12-MONTH HIGH: | 836¢ | LOW: 523¢ |
| DIVIDEND YIELD: | nil | PE RATIO: | 16 | |
| NET ASSET VALUE: | 305¢ | NET CASH: | €618m | |
| Half-year to 30 Sep | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2013 | 3.25 | 685 | 42.0 | nil |
| 2014 | 3.54 | 908 | 57.4 | nil |
| % change | +9 | +32 | +37 | - |
Ex-div: na Payment: na £1=€1.28 | ||||
