Strong Q3 puts National Express on course to meet full year expectations
BIRMINGHAM-based transport group, National Express has seen improved trading during the third quarter with revenue up 5% for the period. For the year-to-date group revenue has risen 3%.
The group said it now remained on course to deliver full year expectations, bolstered during Q3 by strong passenger growth in UK Coach and its Morocco operation, while volumes are also growing in its UK Bus division, which includes Travel West Midlands.
“Our investment to develop our pipeline of new capital-light business opportunities continues to show good progress. The group remains on target to deliver its expectations in the full year,” it said in a Q3 trading update.
Key commercial developments during the quarter included:
• 9% growth in UK Coach core service revenue
• Commercial patronage growth in UK Bus, supported by a new initiative with Centro and the launch of commercial smartcards in the West Midlands
• New Transit contract in North America, three further conversion contracts in School Bus since the summer, and a successful school year start-up
• Improving intercity coach revenue trend in Spain, further mileage efficiencies and strong growth in Morocco
• Ongoing delivery in c2c Rail, with Essex Thameside and Crossrail bids underway, and the company has prequalified for the prestigious Berlin Ringbahn tender in Germany
• Remaining on target to deliver £150m of free cash flow and gearing objectives.
Dean Finch, Group Chief Executive, said: “We continue to perform well, driving passenger growth, increasing revenue and focusing our investment where it makes the biggest difference to our customers. With our strong cash generation and our developing pipeline of capital light opportunities, we are well positioned to generate significant further value.”
Like-for-like commercial revenue increased by 3% in the UK Bus division during Q3, with passenger numbers up 2%. Investment in new fleet helped to attract new passengers, while the firm said more than 40,000 users had downloaded its West Midlands Bus mobile app since its launch in July.
A partnership with transport authority, Centro to promote bus travel was signed in Q2 and a third of the initiatives as part of that agreement are now under way. Bus travel is being supported by highway priority measures and the company has launched commercial smartcards in Coventry.
The period also saw the firm take delivery of the first of the new trams for the Midland Metro, part of a £140m upgrade for the service.
A strong August Bank Holiday helped to improve UK Coach, with the week proving to be the best on record for passenger volume and revenue. Core express revenue in the year to date was up 5%, with growth in Q3 of 9%.
c2c remains the UK’s best performing rail franchise for punctuality and customer service. This has driven good revenue growth for the company.
In Spain, its Alsa business saw flat revenues during Q3, while for the year-to-date revenue is up just 2%. However, the firm said the impacts of austerity and recession in Spain were partially offset by new contracts, with Q3 profit slightly higher year-on-year.
Total North America revenue grew 15% in the year to date, reflecting the full year impact of the Petermann acquisition and new Transit operations. In School Bus underlying revenue increased by 3% in the period.
In outlook, the group said it remained on course to deliver the board’s profit, cash and new business expectations for 2013.
