Investment: BAA set for Terminal 5 decision
Tuesday 02 February 1999
However, the report on the inquiry could take another year pushing back the earliest completion date of the terminal to 2006, the company said.
The news accompanied solid third-quarter passenger traffic figures from BAA, together with stable retail revenue and passenger numbers on the Heathrow Express link to 12,000 per week in the run-up to Christmas.
Pre-tax profits were 6 per cent ahead at pounds 440m, with air passenger traffic up by 7.4 per cent to 88 million in the nine months to 31 December. Stansted was again the star among BAA's seven airports with passenger numbers up by a record 30 per cent. BAA has been helped by the airline price battle, which has boosted the number of holidaymakers as airlines fight to fill seats.
This has helped stabilise retail revenue, which had been hit by the decline in the number of Asian travellers. Retail income was up by 7.4 per cent on the year and 0.1 per cent on the quarter with growth exceeding the rise in passenger numbers during the quarter.
Though often considered a passive retail landlord, BAA has been adding its own stores in several airports. These have included Cigar House, The Wine Collection and The Golf Shop, in addition to the more established Whiskys of the World.
However, there was no news on one of the key issues for BAA - the proposed abolition of duty free shopping within the European Union by the end of June. There has been talk of a possible delay to the ban but no announcement has been made.
Analysts say the loss of duty- free revenue is not as big an issue for BAA as for the ferry operators. BAA will be able to make up most of the lost revenue via a 70p per passenger increase in landing charges that will be phased in over two years.
On BT Alex.Brown's full-year forecast of pounds 485m the shares - up 42p to 765p yesterday - trade on a forward multiple of 21. With the bad news on duty free shopping already in the price, the shares are rated a solid hold.
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