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Ryanair posts rise in profits but warns of 'Brexit developments'

Low-cost carrier Ryanair pledged to continue cutting fares as it posted a 6% rise in annual profits despite intense competition and the Brexit vote.

Chief executive Michael O'Leary said the Irish airline faced "difficult" trading as the group posted profits of 1.31 billion euro for the year to March 31.

It slashed fares by 13% on average over the year amid competition in the industry and expects to reduce fares by a further 5% to 7% due to the weak pound and as it passes on lower fuel costs.

The group said the year was marred by terrorist attacks across Europe, confirming flight bookings fell in the aftermath of the explosion at the Manchester Arena last week.

Bookings have started to recover as Ryanair has launched seat sales in response to the fall in demand.

The group said it also saw "strong bookings" over the weekend after an IT failure hit rival British Airways.

Ryanair is "cautiously" forecasting profits to rise by 8% to between 1.4 billion euro and 1.45 billion euro for the year to next March.

Mr O'Leary warned: "Investors should be wary of the risk of negative Brexit developments, or any repeat of last year's security events at European cities, which could damage consumer confidence, close-in bookings, and this full year 2018 guidance."

He added the group would " continue to pivot our growth away from the UK" amid uncertainty caused by Brexit.

Ryanair reported a 13% rise in passengers, to 120 million in the year to March 31, but admitted it was impacted by delays due to air traffic control strikes and weather disruption at the end of last year.

Its punctuality fell to 88% from 90% the previous year.

The Dublin-based carrier, which flies 1,800 daily flights across 33 countries, is targeting 130 million passengers over the year ahead, suggesting a slowdown in growth to around 8%.

While Ryanair's profits rose to another record high, the group took a hit from the weak pound since the Brexit vote as ticket sales in sterling are worth less in euros.

It warned over profits last October after fares fell more than expected, while airlines have also been knocked by a price war and a shift away from popular destinations Egypt and Turkey after terrorist attacks and political turmoil.

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