Ryanair Share Discussion Threads

[hedge66] 22/6/2003 09:53

From times online today


Analyst warns of passenger decline at Ryanair
William Lewis and Dominic O'Connell



AN influential American research firm has issued a report on Ryanair’s accounts, warning that the company faces a downturn in demand and declining free cashflow.
The Center for Financial Research and Analysis (CFRA), one of America’s top independent analysts, also points out that Ryanair overstated operating cashflow in its 2001-2 results.

The CFRA was founded by Howard Schilit, an accountancy academic, and has built up a strong reputation for independent research. It works for 500 American and British institutions, including hedge funds and rating agencies. It has had an office in Britain for the past 18 months and has covered Ryanair for nine months.

The report comes on the back of an increasing amount of investor interest in the airline’s accounting policies and corporate-governance practices.

The CFRA’s latest report on Ryanair, which focuses on the 2002-3 results, points out that the company’s proportion of unearned revenues — seats sold but not yet flown — has declined, hinting at a possible weakening in demand. The indicator provides “a possible signal of slowing future revenue growth”.

The report also highlights Ryanair’s declining free cashflow, defined by the CFRA as the cash generated from operations, less spending on tax, financing costs and capital spending.

Under this measure, Ryanair’s free cashflow for 2002-3 was negative to the tune of ¤121m (£85m), up from the previous year’s minus ¤58m.

Howard Millar, Ryanair’s finance director, said he welcomed CFRA’s report. He added: “We are in the middle of a big aircraft order with Boeing, and we are paying deposits on aircraft that we won’t see for two years. This spending is heavily front-loaded, and I think the CFRA understands this point.”

The report said that Ryanair overstated its cashflow for the previous year because of the way it accounted for a maintenance contract.

“Because of the capitalisation of the contract . . . it was mistakenly considered cashflow, hence the overstatement,”; the CFRA said.

[mickconn11] 17/6/2003 16:18

Amazing to watch this one. As I speak the price in London and Dublin is being
marked down but over on the Nasdaq it's going up.

I really believe the Nasdaq traders don't watch the price over here in Europe because they're still paying a massive premium for this share. It's very active over there and maybe they're all momentum traders. Thats what it
looks like watching the prices going through the ticker.

It's just been trading at $41.50. In sterling terms this is about 490 pence
and it's currently trading at 400-404 in London.

ADR ratio is 5:1

Great opportunity to get short because eventually that gap will narrow.

[keepgoing] 13/6/2003 13:45

Good to see this taking a caning - further to fall yet.

[lepope] 10/6/2003 20:01

yes I ve just found out, oh well cant win em all

[mickconn11] 10/6/2003 19:52

Cantor and IG do.

[lepope] 10/6/2003 19:49

damn deal4free dont quote them on the Nasdaq only UK

[mickconn11] 10/6/2003 19:28

47.6 Million Euros. Will be marked down heavily tomorrow. Still trading

at a large premium on the Nasdaq. RYAAY.

[lepope] 10/6/2003 19:25

thats about 34 million pounds

[mickconn11] 10/6/2003 19:16

Time to sell before the Americans realise. Trades on the Nasdaq (RYAAY)

[lepope] 10/6/2003 19:05

no 8 mil total

[mickconn11] 10/6/2003 18:25

Director share sales.

[2francs] 07/6/2003 11:21

The Times:

EasyJet loses title to Ryanair
By Neelam Verjee

EASYJET yesterday lost its title as Europe's biggest no-frills airline for the first time since its £374 million acquisition of Go last summer, as latest monthly passenger figures put the rival Ryanair in pole position.
However, shares in easyJet shot up 13 per cent to 187½p, after the budget airline unveiled a 95.9 per cent rise in May passenger numbers to 1.75 million, from 898,000 in May 2002. Investors seemed unconcerned that this was 70,000 fewer passengers than Ryanair carried last month.

All but 20.3 per cent of easyJet's growth in passengers was from acquisitions, mainly Go. The load factor - the average number of seats sold relative to capacity - was up, at 83.5 per cent, from 82.1 per cent last year. Ray Webster, its chief executive, said: "The market softness that we witnessed earlier in the year due to the effects of the Gulf conflict is now dissipating and we have seen a strong recovery."

EasyJet's purchase of Go put it ahead of Ryanair, which had built itself into Europe's biggest low-cost carrier after a decade of strong growth.

Earlier this week, Michael O'Leary, Ryanair's chief executive, threw down the gauntlet to the airline industry, pledging to steal easyJet's crown "within a couple of months".

Mr O'Leary also outlined plans to carry more passengers than British Airways and Lufthansa within three years. The threats follow Ryanair's acquisition of Buzz from KLM, the Dutch carrier, in April.

Ryanair's May passenger figures were up by 53 per cent to 1.82 million people, after the company's addition of new routes and a restructuring of Buzz's services.

[bullsvbears] 06/6/2003 09:32

Diya,

You must decide for yourself, but three days earlier the same destinations were from £2 in many cases.

Lookls like pricing up for the summer season, if (big if)the orices hold.R Remember the Buzz takeover? Ex Buzz route prices were announced, but two weeks later, lo and behold, the prices fell.

In passing I might mention a private discussion recently re the percieved merits of the terms and conditions comparing RYA and EZJ. The consensus was that EZJ overall was preferable, and that RYA was seen as something of a "fair weather" operation.

Might also note that the strikes in France will not do any of the affected airlines any good this summer - especially if, as looks increasingly likely - it turns into a "summer of discontent".

Who is going to book ahead with such a high risk of being faced with disruption and being left out of pocket?

[diya] 06/6/2003 09:01

I have noticed that Ryanair passenger numbers of 1,828,454 are higher than Easyjet 1,759,659. I halve also noticed that Ryanair is giving 1,000,000 seats at £19.99 on their website. This should mean goodnews for Ryanair What does everyone else think

[techmark] 06/6/2003 00:05

It seems that those buying this stock don't understand that lower margins means lower profits, a lower growth rate and eventually when the market wakes up a lower rating for RYA.

[techmark] 05/6/2003 16:38

When companies start saying the only problems we face are over expanding too quickly and then issue a warning that margins are falling, the game is up!

[2francs] 05/6/2003 15:53

Easyjet is a completely different story, different business model and not as profitable. Easyjet must fill 75% of seats to break even and have profit margins at around 10%. Ryanair need to fill under 60% of seats to break even and have normal profit margins around 20% (last year it was 28%).

[sravi] 05/6/2003 15:28

It is flying now but I already got off. What can I say? Never mind. I'll get back in some point.

[techmark] 05/6/2003 15:11

People said the same, when I shorted Easyjet at 505p.

[2francs] 05/6/2003 14:00

I thought the statement was that profit marigns would return to "normal" levels and that Ryanair had repeatedly stated that last years profit margins were exceptional and non-sustainable - it's not new news. Also given the fact that the share price is at about the same level as it was 12 months ago, I see no reason to be too pessimistic.

[2francs] 05/6/2003 09:32

I think it's flying now...