Ryanair has announced full year profits of €319 million.

Budget airline Ryanair has announced full year profits of €319 million after tax, an increase of 204% over last year’s €105m profit.

Annual results yesterday (1 June 2010) showed an 11% growth in the company’s ancillary sales (which includes baggage charges and on-board sales) and a 14% rise in passenger numbers to 67m.

Europe’s largest low fare airline also proposes to pay a one-off dividend of €500m (€0.34 per share) in October, subject to shareholder approval at its September AGM. 

The dividend is the first since Ryanair floated in 1997 and comes after talks over the delivery of 200 new aircraft with Boeing broke down, causing Ryanair to curb its previously focused-upon rapid expansion. Due to this sharp reduction in capital expenditure this will lead to, this one-off dividend will represent a nominal yield of 10% and is a hefty payout.

Chief Executive Mr Michael O’Leary is aiming to return €1bn in total to shareholders by 2013, and initially will receive €20m (£17m) himself as a 4% shareholder. According to The Telegraph, he commented: “About €12m gets paid in tax to the Irish government. I’m sure of the remaining, my wife will probably take about four, and the balance will go on paying Ryanair’s check-in fees and excess baggage fees on the O’Leary’s family holiday. There will be very little left for me, I will just have to keep working.”

Ryanair shares are still trading at a discount to the peak achieved before Iceland’s erupting volcano disrupted travel, which Mr O’Leary estimates will cost Ryanair €50m. The airline was trading at above €4 in mid-April, but slipped back to €3.02 by 25 May.

Of the ash cloud disruptions, Mr O’Leary said:  “The Icelandic volcanic ash “monitoring” led to repeated, unnecessary, closures of large swathes of European airspace over 18 days from the 15th of April. These closures have caused the cancellation of 9,400 Ryanair flights, and the loss of 1.5m passengers up to the 18th of May. The full cost of these cancellations will not be known for some time and will depend on the claims we receive under the unfair and disproportionate EU261 regulations.”

Meanwhile, Ryanair is freezing pay for staff and increasing fares. Prices are set to be upped by as much as 10% this year – adding nearly £3 to a typical one-way flight – ahead of a rise in checked-in baggage fees in July and August.