National Express on right road with profit increase

BIRMINGHAM-based transport group National Express has seen a 23% rise in operating profit as the company looks to grow its five divisions.

Its 2011 H1 results published today show a climb in group operating profit from £95.7m to £117.6m while year-on-year revenues have climbed by 6% from £1.059bn to £1.18bn.

Pre-tax profits have risen in the period from £75.7m to £95.5m but net finance costs have gone from £20.3m to £22.6m.

Group operating margin increased to 10.5% from 9% and the company had secured nearly £250m worth of new contracts in North America and Spain, it said. An interim dividend has been reinstated at 3p per share.

Year-on-year operating profits for the half year have all increased in its UK-based bus, coach and rail divisions.

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Bus is up from £10.9m to £15.2m, coach has increased from £10.3m to £11.7m and rail has risen from £16.1m to £27.1m.

Its divisions in Spain and America have also shown increases in operating profits to £38.6m and £34.6m respectively.

The statement added: “In our UK bus business, we look to increase volumes and offer increasing levels of service to our passengers.

“Whilst we cannot yet say that modal shift is occurring sustainably, there is evidence that the UK recession is encouraging passengers to seek more cost effective modes of transport.

“Rail remains very much part of our plans. We believe that there will be opportunities for us in the next round of franchises.”