Ryanair earnings beat forecasts

Ryanair posted forecast-beating full-year earnings yesterday, buoyed by strong growth in fares and a sharp rise in charges for items such as baggage and in-flight refreshments.

Shares in Europe’s largest budget airline jumped more than six per cent to a record high of €6.764.

The company warned profit growth may slow sharply in the coming 12 months as it waits for new plane deliveries and margins are squeezed by higher fuel costs and cash-strapped consumers.

Yet its cautious outlook was offset by a strong performance in the past year, buoyed by a six per cent increase in average fares as capacity growth in Europe stalled, while non-ticket income from extras such as baggage and reserved seating, which account for around one-fifth of revenue, was up by 20 per cent.

Net profit reached €569 million in the 12 months to the end of March, up 13 per cent and ahead of an average analyst forecast of 558 million in a company poll.

Ryanair chief financial officer Howard Millar said the company was making a cautious forecast for the current year due to poor visibility on bookings in the second half of the year.

“We are extraordinarily modest at the start of the year,” he said. The group warned that profit growth could stall in the year ahead, seeing profit at between €570 million and €600 million, an increase of between zero and five per cent.

A year ago Ryanair had forecast profit of between €400 million and €440 million for the year to March 2013.

“It’s not unusual that the guidance is quite cautious, but they are still forecasting higher profits,” said Davy stockbrokers analyst Stephen Furlong. “Their cash generation remains spectacular.”

The company had net cash of €61 million at year end despite having returned almost €500 million to shareholders in November.