BAA hails retail's strength in adversity

John Rimmer

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The group's nine-month results show a solid performance from its retail operation despite a challenging trading climate

BAA has reported a rise in group operating profit of 9.6% to £548m ($1.03bn) in the nine months to December 31 2004, with net retail income up by 7.5% to £457m ($855m). The airport authority cited the enlargement of the EU and the strength of the pound against the dollar as factors in the performance of its retail subsidiary World Duty Free, but insisted that UK airport retailing performed ?solidly?. Net retail income per passenger over the nine months increased by 1.2% to £4.15 ($8).

BAA CEO Mike Clasper said: ?The business has continued to make good progress. The group's financial results for the nine months were strong with operating profit up by 9.6% and earnings per share up by 21.1%. Our retail business delivered solid results in adverse market conditions. The Heathrow terminal five project is now more than halfway through development, remaining on budget and ahead of schedule. We are on track to deliver our passenger forecast of over 6% growth for the year.?

Passenger traffic at BAA's seven UK airports reached 110.6m in the nine months to December 31, a new record for the company. Third-quarter traffic increased by 4.3% to 33.1m, a slower rate than experienced earlier in the year. Revenue at London Heathrow was driven by 5.8% nine-month growth in traffic along with an increase in landing fees.