Investment column: BAA sales struggle to take off as shares languish on runway
Tuesday 02 November 1999
In the three months to 30 September, profits fell 17 per cent following duty free's abolition on 1 July. The United States operations went into the red in the half year amid increased competition. Meanwhile, the group took a pounds 147m goodwill writedown for the US and the troubled Asian operations. Overall underlying pre-tax profits were flat year-on-year. BAA shares took a 25 per cent drop on the back of the October profits warning, so is all the bad news out now?
Mr Hodgkinson is bullish. He believes BAA will eventually win permission for a fifth terminal at Heathrow. He sees solid passenger growth in the UK, fuelled by the growth of low-cost airlines whose passengers spend their savings in his shops. Indeed, UK passenger numbers rose 5.1 per cent in the half-year. There are plans to add 150,000 sq ft of retail space, boosting the total by 15 per cent. The Heathrow Express is set to post maiden profits in its first full year of operation and full-year results should also benefit from pounds 60m proceeds from disposals, more than twice the expected figure.
However, BAA's real task is to eliminate consumer confusion over the current status of the discounts BAA's European shops offer post-duty free. Although Mr Hodgkinson says that the sales trend is now running in his favour, a full recovery is expected to take 12 to 24 months.
Analysts expect full-year pre-tax profits of pounds 520m, including disposals, or 36.3p per share, putting the shares, up 8.5p at 455p, on a forward price/earnings ratio of 13. Yesterday's assurance that things aren't getting worse may have helped to put a floor under the share price, but investors cannot expect great things for a while. Hold.
- 2 Wikipedia edits from inside Parliament removing scandals from MPs' pages, investigation finds
- 4 Johnny Depp facing 10 years in jail for illegally bringing dogs to Australia
- 5 Iran launches anti-Isis cartoon competition 'to expose true nature of Islamic State'
Wikipedia edits from inside Parliament removing scandals from MPs' pages, investigation finds
Australian man punched in the face for defending Muslim women from abuse on train
Priest warns pupils the 'Charlie Charlie Challenge' is 'demonic activity'
Johnny Depp facing 10 years in jail for illegally bringing dogs to Australia
Iran launches anti-Isis cartoon competition 'to expose true nature of Islamic State'
As a white man, I'm surprised more women aren't tweeting the hashtag #KillAllWhiteMen
EU referendum: David Cameron's rules are a 'democratic disgrace', says French-born Scottish politician set to be denied a vote
The day that Britain resigned as a global power
SNP fury as HS2 finds 'no business case' for taking fast train service to Scotland
A nation of inequality: How the UK is failing to feed its most vulnerable people
EU referendum: David Cameron to deny EU migrants and under-18s the chance to vote
iJobs Money & Business
£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...
£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...
£16 - 20k: Guru Careers: A Graduate Editor / Editorial Assistant is needed to ...
£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...