BAA reports 12% retail income growth

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UK passenger traffic growth and redevelopments at World Duty Free outlets boosts BAA's retail performance

BAA has reported a 12.3% year-on-year increase in net retail income at its UK airports over the three months to June 30. The results, which include sales at BAA's retail subsidiary World Duty Free (WDF), were bolstered by strong growth in passenger traffic, up 9.7% to 35.9m. Retail income reached £146m ($269m) while net retail income per passenger grew 1.8% to £4.06 ($7.47).

BAA noted that redeveloped catering areas at London Heathrow terminal 1, Gatwick South and Stansted had contributed strongly to the results. WDF raised its operating profit by 20% to £6m ($11.04m) particularly as a result of redevelopments carried out at stores at Heathrow T1 and T4 earlier in the year.

BAA group retail director Brian Collie said:  "These figures strengthen the pattern of strong underlying growth we have established since overcoming the worst of the market distortions last year. Most importantly, that positive momentum is being established through the strength and consistency we're demonstrating right across our commercial operations. The significant rises seen across all three of our vital performance parameters - traffic, revenue and profit - illustrate the effectiveness of our retail business and our increasing confidence for the future."

Revenue from BAA's international businesses reached £14m ($25.76m) with operating profit of £4m ($7.36m) following revenue growth at Naples, a new retail management contract at Baltimore and a change in the accounting recognition of its management fees from Asia/Pacific interests.

BAA CEO Mike Clasper said:  "We've made an excellent start to the year across all our operations and this shows through in these results. A record number of passengers have used our airports and operational improvements have allowed us to accommodate the significant growth in passengers during peak periods and contributed to our continued growth in retail income."