Daire O'Brien: Ryanair pays for crude guesswork on oil prices
Michael O'Leary and oil prices were joined at the hip at birth
A recession, Michael O'Leary says, would "highlight the regulatory scam going on" in the UK with regard to airport charges.
Hinting that Ryanair would ground planes at Gatwick and Dublin and launch new services from Birmingham, however, is just more classic Ryanair willy-waving.
When one looks at the actual economics of landing at Birmingham, one sees that it is far from the revolutionary pricing model suggested.
Unless Ryanair has got a deal the likes of which would make its rivals very unhappy, an eventuality considered unlikely by aviation industry insider, it would appear to be paying the standard £5 per passenger charge.
This is actually more expensive than the €6--7 it costs to land a passenger in Dublin, although O'Leary's point about the difference in hassle factor at the respective airports is a valid one.
The fact that Ryanair shares dropped less than 3pc after the apocalyptic scenario outlined by Michael Cawley -- in a market where barely missing numbers is frequently rewarded by double digit falls -- is as good a "buy" signal as any provided by a broker.
The vast majority of the downside is attributed to high oil prices and, over the past four years, Ryanair would appear to have been on the wrong side of most major movements in the price of crude.
Initially, when the so-called 'War on Terror' started, Ryanair refused to hedge until oil fell below $40 a barrel. However, the oil price has never returned to those levels, and in 2006 Ryanair hedged for the period January to March 2007 at $73 per barrel.
By the time early 2007 rolled around, however, oil had dropped to below $60.
Exactly what it had or had not hedged in late 2007/early 2008 is less clear but its stubborn refusal to hedge for 2009 "unless oil gets down to $80 a barrel" could be accused of resembling the roulette player who wants to get back all his losses by continuing to double his stake.
Ryanair seems cheap right now, but with so much of its performance riding on oil prices, investing in its stock has ceased to be just a bet on an airline company, but has become a punt on oil prices as well.
Alltracel boost could be just start of the healing
Could Alltracel boss Tony Richardson -- whose low-key style reflects the way the business is run -- be about to get his reward for building up the company he founded back in 1996?
Appian Wealth Management, founded by former MOPs managing partner Donal Roche, has built a 7pc stake in the medical products company, buying 50,000 shares late last month.
The recent confirmation of "very preliminary" takeover talks led to a spike in the share price but it still trades at last October's levels and at about a third of what it was three years ago.
"Woundcare" is certainly not sexy but one would think it is relatively recession-proof.
Alltracel is a tightly run, profitable company with an innovative product range in a marketplace full of cash-drenched goliaths.
At these levels, it's surely one for the bargain-hunters basket.
Qualceram Shires showing a fine shape to investors
This column has written more than once about the curious case of the Qualceram Shires share price. Last year it confirmed a deal which saw it dispose of its Arklow property for E31m in cash delivering a hefty return of almost E22m after expenses.
The deal was due to be completed in November but as of the beginning of this week no word had been received-- through the stock exchange or company website -- of the actual completion of the deal.
In the current environment, getting E31m for 13 acres in Arklow seems to me to be, ahem, a result.
Imagine the joy of shareholders then when, on Monday, the company announced it had received the lolly - in cash.
Well, it actually got just over E30m but this will still equate to a one-off bonus worth the entire market capitalisation.
Qualceram's ongoing -- and profitable -- operation is now effectively available to stock market investors free of charge.
The company has said it will "reduce debt" with the windfall but I can only find E20m of debt on the books suggesting that the company is now debt-free and has -- an admittedly cyclical -- E50m turnover business with little or no fixed overhead, mainly outsourced staff and zero interest charges.
One of the deductions to the windfall was for "pension contributions" for the directors which can hardly be begrudged for getting the deal over the line.
