National Express to boost coach operation after £15m hit

BIRMINGHAM-based transport group National Express is to continue building up its UK coach division after the operation took a £15m hit following removal of a Government subsidy.

The group said the coach operation’s profit had reduced during Q1, with total concessionary revenue down £2.8m year-on-year, a reduction of 40%.

“Our challenge in 2012 is to begin to mitigate the lower profit caused by the loss of £15m of annual concession revenue, withdrawn by the Government in November 2011,” said the group in a trading update.

“Initial progress following the launch of the group’s own concession card programme has been slower than expected. Nevertheless, concessionary card sales are growing, with 100,000 cards now sold, and the scheme has recently been extended to include airport routes, doubling the weekly rate of card sales.”

Elsewhere, things are looking more positive for the group.

It said it had seen good revenue growth in its Spanish operation, together with its North America school bus business plus the UK Bus and UK Rail divisions.

Both Spain and North America had seen new contract wins, while both operations had grown through small bolt-on acquisitions.

The UK Rail operation as been boosted by the successful pre-qualification for two UK rail franchise tenders – Great Western and National Express’s existing Essex Thameside (c2c) service.

Overall, the group said Q1 trading had been in line with the board’s expectations.
 
Dean Finch, Group Chief Executive, said: “We aim to offer customers reliable, well run services at exceptional value prices. This strategy, supported by fleet investment, strong cost control and continuously improving our network of services, is enabling us to deliver good revenue growth across the business, win additional contracts and expand into new markets.”