Morning business news - May 20Monday 20 May 2013 14.35
RYANAIR PREDICTS SLOWER GROWTH FOR NEW FINANCIAL YEAR - Ryanair has reported annual profit after tax up 13% to reach €569m. The airline says its traffic grew by 5% to 79.3 million and that by the end of its financial year in March it had 1,600 routes. Revenue of €4.88 billion, was up 13% year on year. Ryanair says it is now the number one airline in Ireland, Spain, Italy and Poland, and that within five years it will have 20% of the European short-haul market.
Ryanair's deputy chief executive Howard Millar says the airline delivered a strong performance in the 12 months to the end of March, but predicts that profits will rise only modestly in the next 12 months by 5% to around €570-600m. Predicting a slower rate of growth, Mr Millar says the airline's aircraft delivery programme came to an end last year, although it will be getting more new planes in 2014 while higher oil costs will also hit the company. But he says that Ryanair is still predicting a rise in profits compared to its competitors which are seeing profits fall.
The chief executive of Ryanair, Michael O'Leary, recently confirmed that he plans to stay in the role for another five years and Howard Millar said that with many airlines in difficulty across Europe, both O'Leary and Ryanair see 'tremendous opportunities' to grow.
Mr Millar said that a trans-Atlantic service was not something Ryanair were looking at in the immediate future, although he did admit that the airline constantly keep things 'under review'. He also confirmed that the airline is considering introducing on-flight entertainment on some of its longer-haul flights, such as those from Dublin to the Canary Islands.
Ryanair's deputy CEO said that the company is happy with its Dublin stock market listing, pointing out that the airline is also listed on the Nasdaq on Wall Street and that 40% of the airline's shareholders are US-based. ''We have no plans at this stage to move our primary listing from Dublin to London,'' he stated.
MORNING BRIEFS - After last week's purchase of royalty streams in four new respiratory drugs for $1 billion, Elan has announced two more acquisitions in the fields of rare and orphan diseases, which are used for treating life-threatening conditions with very small number of patients. Elan has agreed to buy Austrian rare drug specialist AOP Orphan for €263.5m and pay $40m for a 48% stake in Dubai-based sales and marketing firm Newbridge pharmaceuticals. It is also making a move into the marketing and distribution of medicines in the Middle East and Africa and announced a share buyback and debt offering today.
*** The Germans are blaming their poor showing at the Eurovision Song Contest on Angela Merkel and her tough stance in the euro zone crisis. That is why, they say, they did not win any points from 34 of the 39 countries voting. German act Cascada was 21st out of 26 countries, getting just 18 points from Austria, Israel, Spain, Albania and Switzerland. Germany television said there was a political situation to keep in mind and all of Germany was being judged. Angela Merkel is popular in Germany for her firm position during the euro zone crisis. But not so much in parts of Europe for her insisting on painful austerity measures in countries like as Greece, Spain and Italy in exchange for rescue packages.
*** Yahoo has announced a deal to buy online content sharing site Tumblr for $1 billion, in the first big bet by Yahoo's new chief executive Marissa Meyer. Tumblr has 100 million users but very little revenue. The move, which will give Yahoo a greater presence in social networking, will also make one more very young Silicon Valley tycoon out of David Karp. Now 26, Mr Karp launched Tumblr from his mother's New York apartment in 2007. Exactly how much he will make is not known because he has investors with undisclosed stakes who will share the Yahoo! proceeds with him. He is known to have sold 25% of the company in 2008.