BAA reports 2 percent increase in FY profits

BAA reports 2 percent increase in FY profits

	Published : Tue, 16 May 2006 12:25 By : James Rowe Print this Story

LONDON - Airport operator BAA PLC today announced a 2 percent increase in full year underlying pretax profit and a 8.1 percent rise in underlying operating profit even as it continues to battle a £8.75 billion takeover bid from a consortium including Grupo Ferrovial SA.

BAA also reported a 2 percent increase in passenger traffic to 144.6 million. BAA's earnings for the year ending March 31 2006 were £620 million as compared to £608 million reported at the same time last year. Retail income per passenger r also showed a healthy increase by 2.9 percent thus increasing the retail revenue 6.8 percent to £616 million. The company, which owns seven UK airports including Heathrow, Gatwick and Stansted, said that the results showed its ability to operate even in difficult conditions.

"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," said BAA chief executive Mike Clasper. He was optimistic about the future and said the group expected the passenger numbers to creep up by 3.5 percent. "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," he said.

BAA has tried to defend itself from the takeover by projecting that the management is very capable of delivering growth despite the prevailing tough conditions. Clasper also praised the shareholders saying that they had stood by BAA even though they were being overwhelmed by the offers. He added that Ferrovial's current offer undervalued BAA, "What I do know is that 810 pence is nowhere near the value of this company. There's a lot of speculation [about a higher Ferrovial bid] but nothing that's on the table."

Shares in BAA were up 1 pence at 837 pence in early trading.