BAA'S share price eased back after its full-year results yesterday although these were better than expected.

It was a mixture of profit-taking after the shares have performed strongly this year and a touch of caution over capitalised interest.

However, the group was quick to stress that the increase in interest capitalised was due to the money spent on completing construction of the Heathrow Express and, therefore, it would fall back this year once the trains started officially running next month.

The interest bill is forecast to increase this year to around #100m due to acquisitions and completion of the rail project.

BAA may have had a tough year in certain areas, the Asian crisis and strong pound did not help. And, in particular, the performance of the American buy was a shade disappointing but there is confidence this will improve in the current year.

Very much on the plus side is the impact of low-cost carriers at Stansted. Analysts still take the view that a basically resilient and low-cost business is complemented by international growth opportunities. Strong volume growth seems likely to continue. Sterling has started to unwind at last although lower spending by South-east Asian visitors will remain a negative factor.

The possible, not to say probable, abolition of intra-EU duty free in June next year is obviously of concern to the BAA. It continues to lobby against this although, despite political pressure, a delay seems unlikely. However, agreed increases in landing charges will offset much of loss.

That said, the share price, which at one time was badly lagging the market, has shown a considerable improvement so far this year.

At current levels, it has done a good deal of catching up and is now perhaps due for a pause.