Higher oil prices, steep discounting and issues with Boeing’s 737 Max aircraft are by now familiar ingredients in European airlines’ soggy in-flight meal of a reporting season. But full-year results for low-cost operator Ryanair (RYA) still managed to disappoint investors, and landed with a cautious outlook for the rest of the calendar year.
Passenger traffic rose by 7 per cent in the 12 months to March, and should grow another 8 per cent in the current financial year. But a further drop in fares – down from the FY2019 average of just €37 (£32) – means the group is increasingly reliant on ancillary sales to reach its 3 per cent targeted increase in revenue per passenger (RPP). A percentage point variance in either direction here will be the difference between group profits of €750m or €950m.
In short, Ryanair is doing more to stand still. This year, the fuel bill is likely to increase by another €460m, while other costs could nudge up 2 per cent on the back of movements in the pound, tougher comparisons, and delays to the delivery of five 737-Max jets, which removes “any meaningful cost benefit” until FY2021.
Prior to these results, analysts at Numis were forecasting adjusted pre-tax profits of €989m and earnings of 80¢ a share for the year to March 2020.
| RYANAIR (RYA) | ||||
| ORD PRICE: | 1,034¢ | MARKET VALUE: | €11.7bn | |
| TOUCH: | 1,034-1,035¢ | 12-MONTH HIGH: | 1,698¢ | LOW: 955¢ |
| DIVIDEND YIELD: | NIL | PE RATIO: | 13 | |
| NET ASSET VALUE: | 461¢ | NET DEBT: | 9% | |
| Year to 31 Mar | Turnover (€bn) | Pre-tax profit (€bn) | Earnings per share (¢) | Dividend per share (¢) |
| 2015 | 5.65 | 0.98 | 62.6 | nil |
| 2016* | 6.54 | 1.72 | 116 | nil |
| 2017 | 6.65 | 1.47 | 105 | nil |
| 2018 | 7.15 | 1.61 | 122 | nil |
| 2019 | 7.70 | 0.95 | 77.4 | nil |
| % change | +8 | -41 | -36 | - |
| Ex-div: | n/a | |||
| Payment: | n/a | |||
| £1=€1.14. *Excludes €398m cash return paid in November 2015. | ||||
