Morning business news - February 6Wednesday 06 February 2013 12.34
AER LINGUS ANNUAL PROFITS UP 8% AS DIVIDEND PAYMENT ALSO RISES - Aer Lingus today published preliminary results for 2012 which show its revenues are up 8% to €1.39 billion. Operating profit before exceptional items came to €69m - that is up over 40% on 2011 to mark the airline's third year of profits growth in a row. The board is recommending an increased dividend of four cent per share, which follows a three cent per share dividend paid in 2011.
As Ryanair continues its efforts to take over Aer Lingus, the airline is making a lot of concessions to allay the competition concerns of the EC. To this end, Ryanair has agreed a deal with UK based Flybe.
Aer Lingus chief executive Christoph Mueller today dismissed the announcement by Flybe that it is to create an Irish operation to fly on certain routes if the takeover bid is successful. Mr Mueller described the deal as a joke.
"We have gained market share from our competitors. I subscribe to the view that weak airlines should disappear. In this proposal it is envisaged that €100m would be donated to a company that has burned through its capital reserves. I believe that a weak bankrupt carrier taking out a profitable airline that serves its customers is not going to fly," he said.
On the proposed takeover deal, Christoph Mueller said the bid was a fraction of the value of Aer Lingus which was unacceptable. He said that shareholders would continue to follow the advice of the company and ignore the offer.
"I'm absolutely certain that this creation of an artificial competitor funded up front and compensated for the losses incurred is simply a joke,'' he said.
ELAN ANNOUNCES CHANGES TO TYSABRI ARRANGEMENT - Elan has reported full year results for 2012, which show that revenues rose to $1.2 billion. Pre-tax earnings came in at $220m - up over 30%. Elan also announced that it and Biogen have restructured their Tysabri ownership agreement. This will see Biogen getting full ownership and control of the multiple sclerosis drug.
Elan's chief executive Kelly Martin says that the Tysabri move provides for a meaningful de-risking of the business. He says that the company will receive a fair amount of value - $3.25 billion - up front when the deal is closed. Elan wil get royalties of 12% of Tysabri global net sales for the first 12 months and then it will receive 18% on up to $2 billion of global net sales and 25% on any sales over that amount. Mr Martin says that Elan will maintain a meaningful interest in Tysabri, which he says is a ''wonderful asset''. He says it is a great treatment for patients and should have long term growth as it matures and more patients start using it.
MORNING BRIEFS - The average prices of family homes in Dublin stabilised and marginally increased in 2012, according to the Society of Chartered Surveyors. It reports further declines in house prices around the rest of the country, albeit at a slower pace than 2011. The society compiles the results from a survey of estate agents who are members. The survey suggests that average prices of second-hand three bedroom family homes in Dublin increased by 2.7% in 2012, compared to a declines of 12.6% in 2011. There were declines in prices in similar style homes in Leinster, Munster and Connacht ranging from 7 to 7%. It also reported a strong commercial property market with the first year of positive returns since 2007 and a strong residential rental market, particularly in Dublin.