National Express drives growth with solid summer performance
National Express has seen a rise in both revenue and operating profit after a solid trading performance in its key summer period.
Updating the markets for the period from July 1 to September 30, the Birmingham-based group reported a good summer’s trading, with all divisions growing revenue and profit.
Its Spanish and Moroccan division, ALSA, performed particularly well which the company said drove a strong group performance.
Group revenue was up 14.5% in reported terms (11.8% in constant currency) while group operating profit grew 14.3% in reported terms (15.0% in constant currency).
Yesterday, National Express announced it has signed a major €1bn, 15-year contract in Morocco through its ALSA division.
The contract in Casablanca will start in November with an initial 400 buses in operation.
The deal follows its announcement earlier this year that it was taking a 60% stake in Silicon Valley’s shuttle service in a £64.5m deal – the US-based employee shuttle company WeDriveU serves many of the largest companies in Silicon Valley and the broader San Francisco Bay Area.
Dean Finch, group chief executive, said: “We had another good trading performance in our key summer period. ALSA performed particularly well and our UK coach business grew despite lapping a very strong comparative period last year. North America posted strong growth, boosted by both our WeDriveU acquisition and a good back-to-school performance including improved wage control.
“With these results, the further delay to Spanish concession renewal and our recent successes in winning, retaining and mobilising significant contracts, our outlook remains positive. We will continue to focus on operational excellence as the foundation of our strategy to drive growing shareholder returns and maintain profit growth in the coming years.”
Growth was also attributed to the renewal and expansion of the company’s second largest North American transit contract, in Boston. This renewal is for up to 7.5 years, starts in January 2020 and will nearly double revenue to $420m across the contract.
Meanwhile, its new National Express Accessible Transport (NEAT) business successfully started operations in the period, in the West Midlands.
“This 400 vehicle operation helps build a strong credential to target expansion in this interesting and growing market,” the company said.
National Express added that the Spanish concession renewal process has been further delayed, after a successful legal challenge by another operator against the live tenders.
“These and future tenders will now be revised to address the legal challenge. This further delay only reinforces our previous guidance that any significant impact from the renewal process on ALSA’s earnings will not be felt for a number of years,” the company said.
