Ryanair confirmed its position as Ireland’s second biggest company yesterday – valued on the stock market at €11.5bn – after its shares rocketed nearly 10pc on the back of financial results and increased full-year profit forecasts.
The share increase saw Ryanair surge past Bank of Ireland, which is worth just over €10bn. Only building materials giant CRH is bigger, valued at around €13.1bn.
The soaring shares had added €1bn to Ryanair’s market capitalisation within a short time of the stock exchange in Dublin opening.
That also saw chief executive Michael O’Leary’s 3.7pc stake in the airline jump in value by €33m to €423m within hours.
Investors piled into the shares as Ryanair’s profits jumped 14pc to €598.2m in the three months to the end of September, with profits for the first half of its financial year 32pc higher at €795m.
It also hiked its full-year profit forecast, predicting it will make between €750m and €770m in the financial year that ends in March. That’s over €100m more than it previously guided.
Revenue in the first half of the financial year was 9pc higher at €3.53bn. Chief financial officer Neil Sorahan told the Irish Independent that Ryanair will cut its average fares by between 3pc and 5pc by the end of December and by up to 10pc in the first three months of 2015.
It’s an effort to capture even more passengers from legacy carriers such as Lufthansa, Alitalia and Portugal’s TAP.
Mr O’Leary said Ryanair’s target this winter is to “grab a lot of market share”.
“We will emerge into next year’s summer peak with so much forward momentum… particularly as the word gets out that Ryanair is changing,” he said.
Ryanair credited its revamped strategy and new website with boosting its business. It carried 51.3 million passengers in the six months to the end of September, 4pc more than in the corresponding period a year earlier.
It expects to carry 89 million passengers in the year to the end of next March, a 9pc year-on-year increase.
Mr O’Leary warned investors not to get carried away with its updated financial targets.
“Those are very ambitious targets,” he said. “We don’t want people running mad. The business is performing very well – but we need to control the irrational exuberance as well.”