Morning business news - November 4Monday 04 November 2013 11.13
RYANAIR WARNS ON FULL YEAR PROFITS AGAIN - Ryanair has warned that its full year profit is likely to be significantly below expectations because of difficult trading conditions across Europe. It is the second time in two months that the airline has had to lower its guidance to investors about how much profit it expects to make. In September, Ryanair cautioned that profit for the year would be around €570m, when investors had been expecting the company to make in the region of €600m. Ryanair has now said the number is likely to be closer to €510m. Ryanair blamed a combination of stiffer competition, weak consumer spending across Europe and a fall in the value of sterling relative to the euro. Announcing half year results this morning, the airline said average fares had fallen by 2% and would continue to fall across the winter. During the six month period to the end of September Ryanair's pre-tax profit was up 1% to €602m compared to the same six months in 2012.
Howard Millar, Ryanair's chief financial officer and deputy chief executive, says the good news for consumers is that air fares are going to fall by 10% over the winter months with the airline seeing a "soft patch" after a strong few months. Mr Millar says that Ryanair now has visibility on the third quarter to the end of December and so it now able to update its profit guidance. He also predicts that Ryanair's rivals, including EasyJet, will have to cut down on their profit forecasts. Ryanair today announced that from February it will move to fully allocated seating on all of its flights and Mr Millar said that passengers can still pay €5 to select where they want to sit. He says that if a large party want to ensure they are sitting together, they should pay to reserve their seats.
MORNING BRIEFS - Connemara Mining is looking for gold in Donegal and it has been awarded 10 prospecting licences to do just that. The company is chaired by entrepreneur John Teeling. He is no stranger to drilling and prospecting and has been known to strike it lucky - notably with the sale of Cooley Whiskey to Jim Beam two years ago which netted himself and his family around €20m.
*** It emerged over the weekend that British retailer Selfridge's is a likely bidder for Arnotts. Loans associated with Arnotts are among the €3.5 billion in debt owed to the former Anglo Irish Bank which are being sold by the special liquidator. Selfridge's, owned by Canadian billionaire Galen Weston who is also behind Brown Thomas, is bidding for the Arnotts loans. They form part of a portfolio of loans known as Project Evergreen. Selfridge's and other bidders for different loans making up that portfolio will be informed today whether they have successfully passed through the second round of bids.
*** The Confederation of British Industry is making its case for the UK to stay in Europe and has published what it calls the business vision for a reformed EU. British prime minister David Cameron has promised an in-or-out referendum on the EU in 2015. The CBI estimates that membership of the EU benefits each UK household by £3,000 a year. It says the benefits of membership significantly outweigh the drawbacks. But it has also called for reform in the single market and urged the EU to get promised trade deals with the US and Japan over the line.