Ryanair bucks trend with €500 million dividend

RYANAIR shareholders were paid a 34c dividend yesterday involving a total payment of €500 million.

This is the group’s first dividend payment since going public 10 years ago.

Bloxham Stockbrokers said the payment was equal to about an 8.5% return on the current share price.

“We don’t know of any airline in the world that is actually paying its equity investors a cash return of this magnitude. Most pay no dividends at all, while those that do offer very low yields,” the broker said.

With just over 55 million shares, chief executive Michael O’Leary is in line for a hefty dividend payment of €18.5m.

In late July the outspoken Ryanair chief sold five million shares for €19.5m which netted him €15.5m after he paid capital gains to the exchequer.

His retained shareholding is worth just short of €210m at current market prices and all the good news is that shareholders could be in line for another €500m windfall in 2013.

Mr O’Leary lost out on about €1.5m in the dividend payout as a result of his earlier share disposal.

By selling the shares in late July the airline boss did not qualify for payment on that holding which would have had to be on the share register on the cut-off date of September 15.

Shareholders still have to approve the payout at the group’s AGM on September 22, but nobody is expecting the €500m bonanza will be voted down. In the year to end March Mr O’Leary took a 10% pay cut, reducing his salary to €595,000 while his bonus of €241,000 was almost half the previous year’s figure.

Ryanair, which is Europe’s largest no-frills airline, announced the planned dividend payment in early June in conjunction with its full year results.

That was its first dividend since it went public more than 10 years ago.

The group said lower fuel costs and solid traffic growth helped it return to an annual profit

In the year that ended March 31, 2010, Ryanair earned €305.3m.

That contrasted with a loss of €169.2m recorded the previous year. Excluding special items worth €274.1m, the airline’s adjusted profit more than tripled to €319m from €105m.

Its performance contrasts sharply with long established European carriers such as British Airways and Air France-KLM.

The decision to pay a dividend came after ending talks with Boeing for an order for 200 aircraft.


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