UK restructure sees strong second half for National Express
Birmingham-based transport group, National Express, has reported its first set of full year results since its withdrawal from the UK rail sector.
The company quit the rail market last February when it sold its c2c rail franchise to Italian operator Trenitalia in a deal worth £70m.
The move saw a restructure of the main group, with the remaining bus and coach operations being combined into a new UK division.
The new division struggled in the first half and saw an overall decline, however, National Express said a combination of sophisticated pricing, network efficiency and disciplined cost management had served to reverse the trend in the second half.
In a challenging year, it said the division had eventually seen a growth in normalised operating profits of 5.3%, with the combined margin improving to 12.6% (2016: 12.1%).
“These headline figures can obscure the detail of the particularly impressive recovery in both our UK bus and coach businesses as management action addressed the challenges they faced,” it said.
Within the West Midlands, its bus operations saw a like-for-like decline in commercial passenger volumes of 0.7% in the first half, but this was wiped out by record growth of 0.7% in the second half.
It is also collaborating with the Mayor of the West Midlands, Andy Street and Transport for West Midlands to establish a plan to tackle congestion and promote bus prioritisation.
It said demonstrating the importance of strong relationships, it was pleased its joint bid to the Department for Transport for bus lanes on the key Harborne to Birmingham city centre route had been successful.
“We have already started operating our state-of-the-art Platinum buses on this route, with the prioritisation work due to start shortly. Our experience shows that where we have introduced Platinum buses and faster routes before, such as Lode Lane, we have seen double digit patronage growth,” it said.
In a topsy turvy year for coach, year-on-year revenues for each quarter were: 1.9% up (Q1); 2.3% down (Q2); 0.8% down (Q3); and, 2.3% up (Q4).
Overall, for the year to December 31, 2017 group revenue rose by a near 11% to £2.32bn (2016: £2.09bn), with pre-tax profit up 18.6% to £200m (2016: £168.6m). Basic earnings per share rose 10.6% to 29.1p (2016: 23.3p), with a proposed full dividend of 13.51p (2016: 12.28p) – a rise of 10%.
The group benefited from a 10% growth in North American revenue, delivered through a combination of organic growth, cost efficiencies and acquisitions.
Its Spanish arm, ALSA, also delivered growth of 3.6%, while its German Rail operation saw growth of 20.4%.
Commenting, Dean Finch, National Express Group Chief Executive said: “I am very pleased with our performance in 2017. Strong performances in our North American and ALSA divisions, combined with growth in our UK businesses, have delivered significant increases in group profit, revenue and cash generation.
“We carried more passengers than we did last year reflecting the strong focus in all our businesses on good service and value for money. Our international diversity is an important asset, but it is particularly pleasing that all divisions contributed strongly to our Group performance. The second half performances of our UK businesses were particularly impressive.”
He said he was confident the group could once again deliver growth in revenue, profits, cash flow and dividends.
