Network Rail stays on track with revenue growth and profits rise
GROWTH in revenue has enabled Network Rail to reduce operating costs and return more than £150m to the Treasury.
Full year results from the infrastructure group show revenue growing to £6,004m (2011: £5,712m), with post-tax profits increasing by £441m to $754m (2011: £313m). Costs were reduced by £120m.
The rail body said the cost reductions reflected progress on a strategy of efficiency measures and revenue growth.
The company, which is delivering the £600m revamp of New Street Station, said it was making steady progress in delivering the challenging efficiency targets set out by regulator, the Office of Rail Regulation, for its current funding period – control period 4 (CP4) – which runs between 2009-2014.
Patrick Butcher, Network Rail Group Finance Director, said: “Our results demonstrate clear and steady progress in meeting our efficiency targets. These targets are tough but we are committed to succeeding.
“In a year where Network Rail has maintained financial discipline, we have continued to deliver a larger capital programme, building the capacity of the railway of tomorrow.
“At the same time Network Rail has shown it is open to change and reform – with the aim of delivering greater accountability and better value and service for our customers and funders.”
Other financial highlights saw capital expenditure grow to £4,600m (2011: £3.997m) and net debt rise to £27,281m (2011: £25,049m) by year-end.
Nevertheless, the company said actual and projected financial performance over CP4 had meant Network Rail had been able to return £153m in the last two years to governments in London and Edinburgh.
Operating costs, excluding depreciation reduced to £2,347m (2011: £2,467m), while staffing costs fell to £1,679m (2011: £1,734m). Average staff numbers fell to 35,253 from 35,606 although average salaries rose by 2.2%.
Operating and maintenance costs per train mile in real terms fell by 84p to £7.04 during the last year, down from the £12.05 – in 2011/12 prices – seen in 2003/04.
Rail performance saw 91.6% of passenger trains run to schedule, up on the 2010/11 figure of 90.9%.
The company said performance targets for the long distance sector remain a tough challenge and the ORR recently announced a suspended fine for being behind target.
Although the sector is currently running at record high levels, with passenger and train numbers running at much higher rates than was assumed, it is still behind the target agreed back in 2007 and the company said it was working closely with train operators to make further improvements.
In the past 10 years Network Rail has added over a million more train services a year, increased passenger numbers by half a billion and doubled the number of passengers arriving on time. Traffic growth is now running double what was forecast in 2009.
