Wednesday, September 04 17:36:44
The ISEQ plunged today as close to three quarters of a billion euro was wiped off the value of Ryanair shares following a warning on earnings.
The index fell 67.16 points to 4,162.55.
Almost a billion euro was wiped off the value of Ryanair this morning after it warned it could miss its full-year profit forecast following a dip in bookings. Shares were down 90c to E5.87. The airline blamed growing competition and a drop in the value of the British pound. This is a surprise statement from Ryanair and comes contrary to some of the commentary from the peer group and indeed Ryanair's own commentary at its June investor days," said Goodbody analyst Donal O'Neill. Airlines across Europe have been struggling with weak economies, high fuel prices and costly fleet upgrades. While Ryanair has fared better than most thanks to its focus on low prices, it faces competition from other airlines looking to win business in the budget segment of the market. Goodbody analysts said Norwegian, Aer Lingus and IAG subsidiaries Iberia and Vueling had all stepped up competition to Ryanair. The Irish airline said it had noticed a "perceptible dip" in yields - average revenue per mile per passenger - for September, October and November, and cited increased competition in Britain, Scandinavia, Spain and Ireland. It also said an austerity drive across Europe and a weaker British currency were hurting demand. Ryanair makes about a quarter of its revenue in Britain.
IFG stocks rose 1c to E1.30. Direct to consumer 'investment supermarket', Hargreaves Lansdown, has reported strong organic growth in the year to end-June with AUA up 38pc to £36.4bn, revenue up 22pc to £282.4m and PBT up 28pc to £195.2m. "The challenge facing the group is to change its pricing model to comply with the RDR. It plans to offer funds with lower annual management changes and at the same time introduce charges for the service it provides, but details have yet to be revealed. In contrast, IFG focuses on the IFA market and is already fully RDR-compliant," said Davy Stockbrokers.