Ryanair spent €150m buying its own shares after Brexit slump
Published 02/07/2016 | 02:30
Ryanair splurged €150m buying its own shares over the past week as its stock slumped following the Brexit vote.
Chief executive Michael O'Leary said yesterday that the carrier would be willing to exploit any "persistent weakness" in its share price to buy even more.
Shares in Ryanair jumped almost 5pc at one point yesterday.
"The airline's board authorised the repurchase of €150m worth of its own shares at an average price of just under €11.85 in the immediate aftermath of the UK Brexit vote last week," said Mr O'Leary. "We believe repurchases at these levels will enhance shareholder returns."
Ryanair's shares were one of the hardest hit in Ireland following the UK's decision to leave the European Union. They were trading at €11.30 on Thursday evening compared to €13.68 before the referendum result.
A profit warning by EasyJet also put pressure on Ryanair's shares.
Following the share buyback in the past week, the carrier has now completed an €885m share buyback programme, buying just over 65m shares at an average price of just under €13.48 each.
But the airline has now reached the 5pc buyback limit secured under a resolution at its annual general meeting last year. It said it will hold an extraordinary general meeting on July 27 to seek shareholder approval to engage in further buybacks.
"It is sensible to request approval from shareholders to allow the board consider further share buybacks over the next 15 months should they deem it in the best interests of shareholders to do so," said Mr O'Leary.
He added that the airline does not intend to engage in a formal buyback programme this year, however.
But that won't prevent it from engaging in ad hoc repurchases.
Ryanair said that while it had no plan to engage in a distinct buyback programme during the remainder of 2016, "the board should have the flexibility and the discretion to do so, if there is further market volatility such as that witnessed over the past week in the aftermath of the UK referendum vote".
Mr O'Leary has previously said that Ryanair would reduce its investment in the UK if it decided to leave the EU.
The airline's chief marketing officer, Kenny Jacobs, told the Irish Independent last week that the carrier's reduced investment would most likely be first manifested next summer, when extra capacity might be deployed elsewhere in the EU.
Ryanair has spent about €4.2bn on special dividends and share buybacks over the past eight years.
That included money it returned to shareholders last year following the sale of its near 30pc stake in Aer Lingus.
Meanwhile, EasyJet is on the hunt for a possible new HQ within the European Union following the referendum result. It's speculated that it could even size up Dublin as an option.