National Express on course for "significant" improvements
BIRMINGHAM transport group National Express said today it was on course for a significantly improved financial performance with margin improvement across all its businesses.
In a trading update ahead of its half-year results, the company said it had seen growth across five of its divisions continue into the second quarter and it was now targeting new expansion with contracts for North America and Spain.
Dean Finch, group chief executive, said: “Building on our encouraging revenue growth in the first half year, I expect National Express to deliver a significant improvement in financial performance this year, in line with current market expectations.
“Continued cost control has been increasingly supported by organic growth and targeted bid success. We are well placed to deliver industry leading margins, leverage further growth opportunities and explore additional value-creating possibilities.”
In Spain, passenger revenue in the first half year has increased by 7%. The challenging domestic economic environment and higher fuel costs have enabled Alsa to leverage its competitive value position versus car and rail. The Intercity division also continues to see growth, particularly on routes from Madrid.
Revenue has increased by 8% in North America. A successful bid season last year, which saw 700 net routes added from September 2010, has been supplemented by a return to organic growth in its existing school board contracts and initial success in growing charter market share.
The group has had another successful bidding season in 2011. As this comes to a close, almost 600 routes have been added on a net basis. With seven conversions and a 98% retention rate, it said this demonstrated the strength of the renewed platform in North America.
Against a continuing weak regional economic backdrop, the UK Bus recovery plan has delivered further revenue growth through yield improvement, combined with targeted network optimisation and margin improvement. Commercial revenue in the West Midlands has grown by 6%, more than offsetting a small decline in concessionary fares, following changes to the nationally funded scheme.
It said its UK Coach performance was starting to reflect the structural improvements implemented by the new management team. Revenue growth of 7% in the core express network reflected the brand’s new value fares, supported by targeted marketing expenditure and a focus on improving customer service. Revenue grew in each of the core operating segments, with additional airport and London routes driving new opportunities.
There was strong volume growth in the UK Rail business, which delivered a 7% increase in passenger revenue with both the East Anglia and c2c franchises performing well.
The group issues its half year results on July 28.
