BAA full year profits fall by 17%

The British Airport Authority has posted a 17 percent fall in full year pretax profits. This was due partly to one-off charges.

BAA said it expects to see a 3.5 percent rise in passenger numbers during this year.

UK airports’ passenger traffic up 2.0% to 144.6 million (2004/05:141.7 million) and Naples broadly flat at 4.6 million passengers for the year.  Budapest Airport passenger traffic grew 9% to 1.6 million for the first three months of ownership.

Revenue up 7.4% to £2,232 million (£2,078 million)

Operating profit up 8.1% to £710 million (£657 million)


UK airports’ net retail income grew 4.8% to £616 million (£588 million) and net retail income per passenger rose 2.9% to £4.28 (£4.16)

Statutory results:

Revenue of £2,275 million (£2,115 million)

Operating profit £859 million (£1,031 million); excluding certain re-measurements and exceptional items, operating profit £710 million (£695 million)

Profit before tax £757 million (£915 million); excluding certain re-measurements2 and exceptional items, profit before tax £620 million (£608 million)

Basic earnings per share 49.3 pence (63.0 pence); excluding certain re-measurements2 and exceptional items, adjusted basic earnings per share 40.7 pence (40.2 pence)

Net debt £5,340 million (£3,064 million) and gearing (net debt:net assets) of 89% (54%)

Proposed final dividend 15.25 pence (14.30 pence)

Mike Clasper, BAA’s Chief Executive Officer, commented:

“We have again converted passenger growth into stronger underlying operating profit, thanks to our ability to drive retail income, our diligence in controlling costs and rising tariffs at our three London airports.  This achievement is despite difficult operating conditions - the London bombings in July, the Gate Gourmet dispute in August and the slowing economy in the UK.

“These results are a reminder of BAA’s core strengths that enable us to consistently generate shareholder value: a unique portfolio in a dynamic sector; strong growth of our London airports; even stronger returns from our other businesses; and a first rate management team creating value. These strengths gave us the confidence to acquire Budapest Airport, a fast growing, commercially underdeveloped airport that is a perfect fit for our management skills. In our short tenure of Budapest we have already made significant progress towards running the airport to the BAA model and integrating it within BAA’s portfolio of airports.”

“Looking forward, this year we are forecasting a 3.5% rise in passenger numbers and I am confident that we will convert this growth into another good financial performance. There are clear, value-creating opportunities ahead of BAA, such as our plans for Budapest, the transformation of Heathrow and a second runway at Stansted.  Such opportunities, combined with a regulatory regime that is required by law to incentivise investment in airports, means that shareholders have strong reasons for confidence in the value of BAA.”