Ryanair reaffirms profit forecast, announces €800m share buyback

Ryanair on Monday reaffirmed its full-year profit forecast after higher passenger numbers offset lower fares and said it would return €800m to shareholders through a share buyback.

The Irish low-cost giant hiked its full-year profit forecast by 25pc in early September, citing poor summer weather in northern Europe, weak sterling and the impact of improved customer service.

But security alerts after attacks in Paris in November and strong competition forced it to cut average fares to fill its planes.

Average fares fell 1pc in the last three months of the year and will fall 6pc in the three months to March 31, Ryanair said, a slight downgrade to earlier forecasts.

But traffic remained strong, up 20pc on the year in the last three months of 2015, and management said it now expected to carry a record 106 million passengers in its financial year to March 31, up from an earlier forecast of 105 million.

Ryanair re-affirmed its expectation to post net profit at the upper end of a range of €1.175bn to €1.225bn for its financial year.

“In light of our rising profitability and improving cashflow, the board has approved an €800m share buy-back to commence on Feb 5 next,” Chief Executive Michael O’Leary said in a statement.

Ryanair shares closed Friday up 36pc on the year at €13.69, while the Thomson Reuters European Airline Index .TRXFLDEUPUARLI was flat. Ryanair shares have fallen 8.8pc since the start of the year, compared to a fall of 10pc in the index.

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