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.
- 1 East 17 bandmember Brian Harvey in 'very desperate situation’
- 2 Vladimir Putin says Russia will fight for the right of Palestinians to their own state
- 5 Germanwings plane crash: I have depression. That doesn't make me a psychopath
East 17 bandmember Brian Harvey in 'very desperate situation’
Vladimir Putin says Russia will fight for the right of Palestinians to their own state
Ohio Democrat Teresa Fedor speaks out during abortion debate to reveal she has been raped – and is interrupted by laughter from Republicans
Germanwings plane crash: Investigators may have already found remains of suspected killer co-pilot Andreas Lubitz
Children take eight Isis captives to be beheaded in latest propaganda video
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Street preacher quoting from the Bible fined for calling homosexuality an 'abomination'
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
The West has it totally wrong on Lee Kuan Yew
iJobs Money & Business
£20000 - £35000 per annum: Recruitment Genius: This multi-award winning foreig...
Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...
Negotiable: Recruitment Genius: You will be the first point of contact for all...
£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...