BAA reports "outstanding retail performance"

Gavin Lipsith

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CEO Mike Clasper praises the group's retail success, contributing to 11.4% growth in operating profit over the first half of the financial year

UK-based international airports group BAA has reported strong growth in its retail operations for the first six months of the year, with net retail income growing 9.1% on the same period last year, to £312m ($578m). Net retail income per passenger increased 1.2% to £4.03 ($7.46). BAA CEO Mike Clasper highlighted an "outstanding retail performance" as a key factor in the group's 11.4% growth in operating profit to £391m ($724m).

BAA retail subsidiary World Duty Free held operating profit at £13m ($24m) despite the enlargement of the EU.  The company reported that it plans to maintain the momentum it has gained from recent innovations, including the opening of the Next Generation wines and spirits store in London Heathrow terminal four, as well as drawing new brands to airports following its exclusive non-US deal with Victoria Secret Beauty earlier this year.

Said group retail director Brian Collie: "This is a robust performance achieved in the face of the impact of this year's EU expansion and the continuing weakness of the US dollar. Our results highlight the way we are combating those issues through delivering the right offer to our customers.  We are well placed to deliver net retail income per passenger in line with last year."

Operating profit for UK airports (including WDF) grew 12.2% to £377m ($698m), although revenue growth was partially offset by growth in operating costs as the result of security staff recruited last year, wage inflation, higher pension costs and growth in depreciation.   

Revenue from the group's international businesses (including joint ventures) increased to £35m ($65m), with stronger operating profit of £16m ($30m) reflecting strong growth at Naples, Melbourne and other Australian interests, the group's retail contract at Baltimore Washington International airport and additional retail capacity and passengers at Boston airport.