Friday lunchtime business bulletin

May 16 2008 By Karen Dent

London trading enjoyed a buoyant end to the week today after investors were cheered by better than expected results from British Airways.

Despite a year of troubles, including spiralling oil costs and the Heathrow Terminal 5 opening shambles, the carrier posted record profits of £883m and paid its first shareholder dividend since 2001.

With a third day of gains forecast on Wall Street, there were wider rises across the FTSE 100 Index, driving it up 83.9 points to 6335.7 by mid-session.

BA’s profits triggered bonuses for all staff except chief executive Willie Walsh. He will not be benefiting after he surrendered his payout because of the opening problems at Terminal 5. Shares in the carrier were among the Footsie’s top risers, up 12p at 236p.

But the airline was beaten to the top by British Energy, which gained 6% after it revealed it had received a range of proposals from several parties. Shares were 43.5p stronger at 723.5p, reversing losses seen in recent days amid fears that EDF would win the company with a proposal worth less than 700p a share.

Bar operator Regent Inns today said higher alcohol duties imposed in this year’s Budget had added to sales pain at Australian-themed chain Walkabout.

The group reported a like-for-like sales decline of 10.9% at its entertainment bars division for the period from December 30 to last Wednesday, with the downturn principally due to poor sales at Walkabout.

Regent said it continued to feel the impact of the smoking ban and declining consumer confidence, while significant increases in alcohol duty announced in the Chancellor’s Budget had added to its problems.

Despite the sales disappointment, Regent shares rose 6% after it said it remained in takeover talks. US buyout specialist Sun Capital Partners is believed to be the front runner to buy Regent, which first reported takeover approaches in January. Sun Capital, which owns businesses such as Lee Cooper jeans, is ahead of nightclub operator Brook Leisure in the race for the business, a report said recently.

Specialist trips firm Holidaybreak today said hotel break profits jumped 11% as the popularity of theatre visits and high-profile exhibitions such as Tutankhamun showed no signs of abating.

The Cheshire-based firm has seen "extremely robust demand" for London trips thanks to the Egyptian boy king - on display until August - as well as the exhibition of China’s terracotta warriors, which closed in April.

Hotel break sales were 7% ahead of last year during the six months to March 31, with profits rising to £6.8m. Despite mounting economic gloom, the company also hopes theatre shows such as next year’s production of Oliver! will tempt customers and is confident over prospects.

Holidaybreak reported healthy booking levels for its PGL and NST education businesses - bought last year - which boast a range of outdoor activity centres and organise school trips for students.

The group’s upbeat stance came despite pre-tax losses widening from £6.8 million to £15.4 million following the impact of the deals in the seasonally quieter period.

The pound at midday was US$1.9472 compared to US$1.9491 at the previous close, while the euro at midday was £0.7934 compared to £0.7948 at the previous close.