National Express pleased with strong start to the year
BIRMINGHAM-based public transport group, National Express has made a good start to the year with revenues up 4%.
The company has said it remains on track to deliver profits and cash generation in line with expectations.
In an update covering the period from January 1, 2015 to date, the group said all its divisions had delivered revenue growth, supported by rising passenger demand.
Performance highlights during the period have included growth in revenue across all divisions with passenger volumes up 2% and group profit ahead year-on-year after adjustments for one-off costs due to adverse weather in North America and the strike in Spain last year, and also after absorbing increased premium charges in rail franchise c2c in 2015.
Gearing is said to be lower than in the same period last year and it is on target to generate £100m of free cash flow during the year.
It has also benefited from a strong performance in its UK Bus division (which includes Travel West Midlands), supported by passenger demand and cost control.
It described as “encouraging” the start to its new c2c franchise ahead of the bid plan, with passenger volume growth of 4% and revenue growth of 10% boosted by good growth in peak and off-peak travel.
Abroad, revenue management in Spain delivered a 4% revenue growth, aided by a 7% increase in passenger volume on actively managed routes. It is now considering rolling out the service further.
In Morocco, revenue was up 17%, driven by the scaling-up of operations in Tangier, and it continued to benefit from contract retention in its North America School Bus operations.
Its German rail operations are also performing well, with the promise of an eventual £12bn pipeline.
Back in the UK, the period has seen new contract wins in UK Coach to operate from Stansted Airport and with British Airways to provide transport services for passengers and crew across the UK.
Dean Finch, Group Chief Executive, said: “We have made a good start to 2015 and are on track to deliver the board’s expectations for the full year.
“The results reflect our ongoing commitment to deliver excellent operational performance and customer service. We continue to drive our strategy to develop opportunities in existing and new markets with a number of exciting bids submitted since the start of the year and our plans for further bids are progressing well. We have seen the successful mobilisation of our operations in Bahrain, our first bus service contract in the Middle East, which we see as an important stepping stone towards further growth in the region.
“We continue to see Germany as an important market for our ambitions in rail and see prospects for further growth there. We believe that, in time, German Rail will make a significant contribution to group earnings. Around the world, whether as a result of privatisations in Western countries or pressure for improved public transport in developing and emerging economies, we see a range of exciting opportunities for us. Our portfolio of assets uniquely positions National Express to exploit these opportunities.”
The group will announce its results for the six months to June 30, 2015 on July 29. 2015. There is no scheduled trading update before that announcement.
