A bumpy landing?

What’s happened

BAA is never out of the news, and when chief financial officer Margaret Ewing
sits down to present the annual results on Tuesday, she will no doubt expect to
hit the headlines once again. Because if nothing else, being the head of finance
at one of the biggest airport operators around is going to be something of a
turbulent ride in the near future.

There are takeover bids to battle with, management of a £9.5bn investment
programme and grappling with the slipping timetable for the expansion of
Stansted airport. Is there any CFO on the FTSE 100 who could claim a diary that
is quite so full at the moment?

What’s next

The first task for Ewing will be to try and find a way to keep a grip on the
£9.5bn budget, which will be used in part to fund vast modernisation programmes
at Gatwick, Heathrow and, of course, Stansted. For most FDs a couple of million
would be significant but keeping a handle on £9bn will be a tall order requiring
watertight systems and concentration on the numbers. It will also need some
nerve if the spending begins to run out of control. Big spending programmes have
a terrible habit of running over budget.

Then there’s the Stansted issue. BAA wants to add another runway and terminal
– a proposal ardently fought against by the locals. It’s not necessarily Ewing’s
job to man the trenches on this one, but it could prove a major distraction from
her other work.

If that wasn’t enough, there are the takeover bids – perhaps one of the most
onerous experiences for a CFO to go through as they focus on crunching the
numbers to assess whether the offer is a good one. The board has a duty to
consider the offer on the shareholders’ behalf and Ewing will have played a
central role in looking at the bids and figuring out the PR strategy.

It is hard going just dealing with one offer, but BAA is now working through
its second. It rejected the Goldman Sachs Infrastructure Group bid, which priced
the company at £9.4bn, but now it is in the process of fighting off Spanish
construction giant Ferrovial, which has valued the company at £8.75bn. That
said, if Ferrovial comes back with a better offer, then Ewing’s days are likely
to get even busier. Interesting times ahead.

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