Daily Stock Market Report (Fri 3 Jan 2025) - WIZZ, RYA, VLX

Good morning! Let's see what the newswire has for us today. 

7.15am: my initial impression is that today's feed does not contain any items that I would ordinarily consider to be worth covering. I will add the briefest of comments on WIZZ, RYA and VLX.

9.10am: today's report is now finished. I guess this will be the last weekend before the RNS gets busy again!

12 Stocks of Christmas: this series continues today with Mark Simpson looking at Serabi Mining (SRB). This stock also featured in Ed's QVM Portfolio.

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Wizz Air Holdings (LON:WIZZ) (£1.46bn) - December 2024 Traffic Statistics

This Hungarian airline saw December bookings increase slightly year-on-year, despite a reduction in capacity. Its load factor therefore increased from 82.1% to 86.5%. Early indications for the company's Q4 period (Jan to March) are "positive, with bookings currently running ahead by over 2ppts [percentage points] vs this time last year".

Graham's view: the cheap earnings multiple at which this stock trades (PER 5.6x) is explained by the net debt figure of nearly €4.8 billion (as of the Sep 2024 interims).

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Ryanair Holdings (NSQ:RYAAY) (£17.1bn) - Ryanair December Traffic

Ryanair doesn't have a London listing these days, but let's check in on its latest numbers anyway.

The total number of December passengers was up 8% year-on-year, and the monthly load factor was up 1 percentage point to 92%. Note the difference vs. Wizz Air at 86.5%.

The rolling figures for the financial year show Ryanair's load factor running at 94%.

Graham's view: the market will have priced them in already, but today's figures are unambiguously positive. Ryanair also runs a net cash position (€0.6 billion as of Sep 2024) even while buying back shares in large quantities and paying dividends. Ryanair's shares trade at a premium to its peers and rivals, e.g. RYA is at 12x while EZJ is at 8x.

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Volex (LON:VLX)  (£497m) - Deferred consideration for acquisition - GREEN

This is a good news update: a Turkish business acquired by Volex in 2023 has hit its initial EBITDA targets.

The result is the payment of €10m (£8.3m) in cash to the vendors, along with 2.9 million new VLX shares (value around £8m at the current share price). There are already over 180 million VLX shares outstanding, so the dilution is limited.

If EBITDA targets are also hit in the current year, it will result in a second and final set of defcon payments.

Graham's view: VLX shareholders should be very happy that Murat Ticaret is hitting its targets; this was a very large deal with a total potential cost of up to $200m. Hopefully the acquired company's EBITDA is converting to cash and helping to fund its own defcon payments. That should always be the aim in this type of situation.