RYANAIR UPGRADES FULL YEAR OUTLOOK - Ryanair says it will make a profit this year. The company had expected to just break even, but in a statement issued this morning with its results for the three months to the end of December, the airline says the outlook for the remainder of its financial year has improved. Ryanair says it will benefit from lower oil prices so it is upgrading its outlook to a profit after tax of €50-80m. Its third quarter figures show a loss of €103m, compared to profit of €35m the same time last year. The loss was almost entirely down to increased fuel costs. The airline says its average fares are down by 9%, but that in the three month period traffic grew by 14% and revenues grew by 6%.
Ryanair's deputy chief executive Howard Millar says that while the airline is disappointed by its third quarter loss, it is buoyed by the fact that fuel prices have more than halved over the last few months. He says the airline expects fares to fall by about 20% in the fourth quarter, but despite this Ryanair is now expecting to see profits of up to €80m. He says the current recession is presenting Ryanair with enormous opportunities, adding that unlike other carriers Ryanair expects to grow by about 14% next year to almost 66 million passengers. Mr Millar also calls for the removal of the 'crazy' travel tax to be introduced from April.
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FEWER FIRMS SUCCESSFULLY GETTING THROUGH EXAMINERSHIP PROCESS - New figures from accountants Grant Thornton show that more companies are seeking protection from creditors through examinership, but fewer companies are emerging successfully from the process. In a sign of the times, last year the High Court appointed examiners to 70 companies - that is over twice as many as the year before. The research, which covers all of 2007 and 2008, reflects the changes in the economy over the time. Most companies that went into examinership at the beginning of 2007 are still in business, while the success rate of those that entered the process towards the end of last year is just 30%.
Michael McAteer, of Grant Thornton, says the increase in company failures is down to two main reasons - the lack of cash available in the system on both the banking and private equity side and the fact that the wrong type of company is using the examinership process. In 2007, three of the four companies who availed of the process were involved in the construction sector and exited the process successfully. But in 2008, of the 11 construction firms who went into examinership just two came out the other side.
Mr McAteer says this is a need for a new process to help companies trying to get out of insolvency, would be different than the current models of examinership, receivership and liquidation. He points out that the examinership process is a very time-consuming and costly process. In other countries such as the UK, a process exists calls credit voluntary arrangement, which is done outside the court process and therefore is quite a cheap solution.
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MORNING BRIEFS - Recruiter CPL has reported pre-tax profits of €6.02m for the six months to the end of December 2008, down from a profit of €11.73m the same time last year. The firm said the reduced profits are due to 'the extremely challenging business and employment background' in its main markets.
*** A new recapitalisation plan for Bank of Ireland and AIB is set to be announced early this week. The injection will involve much bigger sums than originally planned when recapitalisation was announced in December. A figure of €8 billion is expected to be announced either tomorrow or on Wednesday. It will include an injection of more funds, and State insurance against bad property debts.
*** Research by quantity surveyors Davis Langton PKS shows that construction tender levels fell by 13.5% last year, and further reductions are on the way this year. It also says that tender prices for both big and small construction jobs fell by between 20-30% from 2007 levels.
*** On the currency markets, the euro is trading at $1.27.31 cents and 88.3 pence sterling.
