Strong summer drives revenue and profit growth for transport group

Birmingham-based transport group National Express has been boosted by a strong summer period leading to a rise in revenue and profit.

In a trading update for the period from 1 July 2018 to 30 September the company said group revenue was up 9.5% in reported terms (8.9% in constant currency), while pre-tax profit was up 18.3% in reported terms, and that group margin is also up year-on-year.

National Express said it expects to continue this positive momentum in the medium term as Spanish concession renewals are still paused.

“We do not believe there will be any impact from renewals in 2019 and each passing week further reduces any impact in 2020,” the company said.

The firm’s major Rabat urban bus contract starts in mid-2019, making it Morocco’s largest transport operator. This joint venture will operate nearly 500 buses and is expected to secure around €1bn of revenues with the full earnings benefit felt from 2020.

National Express also said: “It is increasingly apparent that our North American School Bus customers with the highest satisfaction score are not only more likely to retain us, but also more willing to pay a premium for quality services. Half of our customers are currently on this highest satisfaction score and a programme to move more into this group has started.”

Dean Finch, group chief executive, said: “We had a good summer’s trading, with our UK coach business in particular delivering outstanding organic growth. Group revenue and profit are up strongly and we are carrying more passengers. We expect this momentum to continue in our traditionally quieter fourth quarter.

“With Spanish concession renewals further delayed, a major contract starting during 2019 in Rabat and encouraging pricing trends in North America, our outlook is positive. Our continued focus on cashflow and operational performance should allow us to continue to grow profit in the years ahead.”

In mid-September, National Express acquired coach business Stewarts, which it said expands its B2B operations amongst blue chip companies in the fast-growing M4 corridor, and provides further opportunities in the in-bound tourist market to complement its Clarkes of London services.

National Express also won its largest ever transit contract secured through open competition. The 115 bus operation in San Bernardino, California, is its seventh contract in the state. It is due to run for five years, securing nearly $20m in annual revenue.

 

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