IMichael was a chief executive of Ryanair to declare that a full year profit of € 1.02 billion (£ 0.9bn), down 29%, was “in line with the previous guidance”. It updates its guidelines every few months so it is difficult to fail, by the time of the big disclosure. The past year still included two profit warnings, let's not forget.
Start back the 12-month clock to get an idea of how much height Ryanair has lost. A year ago, he predicted € 1.25bn to € 1.35bn for the financial period which ended in March, calling his estimate “on the pessimistic side of caution”. It seems to be optimistic heroic, which is why Ryanair's share price has fallen by a third since.
Competitors' prices have fallen in the same way and some smaller competitors have gone to the wall, it should be said. Lower average prices – Ryanair had fallen by 6% to € 37 – affecting everyone. It is also true, as OLeary never mentions, that Ryanair's balance sheet is one of the strongest in the business. This year, the company can afford to buy a share of € 700m.
Yet it is difficult to shake the sense that Ryanair, in recent years, would have been setting the financial speed, rather than declining in line with the package. Have the effects of strikes and canceled cancellations in 2017 come to an end? Does OLeary find it difficult to adapt to a unified workforce, one of the by-products of that saga? Whatever the explanation, last year's profit was 13% walkers by Ryanair standards.
It also revealed how heavily the airline relies on “complementary” revenue. This contribution covers everything from priority boarding to car hire agreements to Kit Kats in an overvalued aircraft that has grown to a third of the total. Additional expenditure of this kind for each passenger rose by 11% to € 17 last year and any intervention in that upward trend would become a severe headache. Meanwhile, the introduction of Boeing's 737 Max aircraft will be late (assuming that the base aircraft arrive) will delay fuel efficiency savings until 2021.
This time, OLyy chose a very wide range in its latest profit forecast – anything from € 750m to € 950m. Ryanair's financial performance is becoming increasingly difficult to predict.
Labor must give the best to keep to the Graig
The Labor front bench will not like Clifford Chance's thoughts on the law on nationalization, but MPs are advised to read the law firm's analysis – particularly the piece about what happened with Northern Rock.
The nationalization of the bank based in Newcastle in 2008 tends to be marked by Labor as evidence of how the “parliament” can determine shareholder compensation, a line repeated in the policy document Bringing. Energy Home last week described how gas and electricity networks would be brought into public ownership.
Clifford Chance makes two points. One is obvious: Northern Rock was insolvent, so our odd example is to quote in the context of profitable energy companies. But the legal point of grazing is more important. The emergency legislation allowing Northern Rock to be nationalized required shareholders to obtain compensation at market value. That value was nothing, as was judged by the independent assessor and as confirmed by the courts, but the legislation still referred to the market.
There are many ways of measuring the market value, of course. The process is more complicated than just looking at share prices, especially when, as with the energy sector, most companies live away from the stock market & # 39 partition of the National Grid, which also has a significant operation in the US. But Clifford Chance looked at all post-war states in the UK, starting with the Bank of England in 1946, and concluded that there was some form of market-based compensation in each case.
A Labor administration coming in can try to ignore that history but will invite legal challenges. In simple terms, “Northern Rock” is unlikely to be enough.
Will regulators operate on Metro Bank?
Fund managers at Legal & General and Royal London have called for reform in the Metro Bank boardroom, but Vernon Hill, the founder and the non-independent chair, is likely to secure another crucial majority. for re-election at Tuesday's annual meeting. Even after a £ 375 million share in last week's share price and fundraising, it is assumed that the core of US investors is loyal.
If changing a boardroom is to be enforced on Metro, then it is a matter for the regulators. They are moving slowly but it is hard to believe that the Bank of England will be relaxed on the Metro allocation of £ 900m from loans to the wrong risk bracket, which is how the story started in January. Basic accounting errors reflect poorly on the whole system. In the end, regulators tend to demand scalp.