THE pressured sale of Gatwick airport has left a bitter taste for BAA, which saw its full-year pre-tax loss more than double to £822m yesterday.
A £277.3m writedown related to the £1.5bn offloading of Gatwick to Global Infrastructure Partners was a big contributor to the slump at the airport operator. The transaction, which was completed in December, followed a recommendation from the Competition Commission.
BAA, which is owned by Spain’s Ferrovial, was also stung by a £217.8m charge caused by its widening pension deficits and a £117.4m mark-down on the company’s interest rate swaps.
Chief executive Colin Matthews took heart from the resilience of Heathrow, where passenger numbers fell just 1.5 per cent compared with steeper declines suffered by competitors. Overall traffic at BAA’s airports dropped 3.8 per cent to 85.9m passengers as carriers such as British Airways cut flight capacities to reflect the recessionary forces facing consumers.
The sale of Gatwick, a £500m share placing and a £900m bond issue helped cut net debt by nine per cent to £8.6bn by the end of the year.
Matthews said: “BAA made substantial progress in 2009, against a difficult backdrop. We sold Gatwick, returned to the debt capital markets and our future regulation is clearer.”
Credit analysts were satisfied with the group’s earnings, which rose 17.1 per cent to £885.2m on the back of decent trading from BAA’s retail outlets.
Olek Keenan at JPMorgan said: “The cashflow was probably where everyone thought it was going to be. And in terms of the writedowns, they are what they are.”
BAA is still locked in a legal tussle with the Competition Commission over whether it should divest further airports by 2011.