National Express results show steady improvement

National Express Group results for the year ended 30 December 2013 show steady growth over the previous financial period.

Group revenue of £1.89bn (2012: £1.83bn) was 3% up, but net debt fell  to £746.1m (2012: £828.2m) and on is on target to reduce to 2X EBITDA (earnings before tax, interest, depreciation& amortisation) by the 2014 yearend.

Group normalised profit before tax was 12.4% down at £143.7m (2012: £164.1m). If intangible amortisation (£49.3m) and exceptional items (£25.7m) are excluded, group profit dropped further to £64.4m (2012: £69.8m).

NEG consists of five main business streams, but UK operations only account for around one third of group turnover. For 2013 the percentage portions were: North American Bus (34.1%); Spanish Coach & Bus (29.9%); UK Bus (14.5%); UK Coach (13.9%); and Rail (7.6%).

UK Coach: Total revenue increased 3% to £263.5m (2012: £255.1m), but core express revenues were up 7%, largely due to network and service improvements. The operating profit improved by 18.9% to £24.5m (2012: 20.6m), pushing up the operating margin to 9.3% (2012: 8.1%).

UK Bus: Total revenue increased 2% to £273.4m (2012: £269.0m), but operating profit fell 8.5% to £31.2m (2012: £34.1m), though the  11.4% operating margin is still relatively high (2012: 12.7%).

Performance was affected by changes in pension accounting, and by reduced government fuel duty rebate (BSOG). The number of commercial passenger journeys rose by 1%, and during H2 the concession income was 2% up on the previous year.

Rail: Total revenue fell 26.7% to £143.0m (2012: £195.1m); the operating profit plummeted 63.3% to £9.8m (2012: £26.7m); and the operating margin slumped to 6.9% (2012: 13.7%).

The poor performance – which also depressed the main group result – is largely due to the ending of the Greater Anglia franchise in February 2012. Currently NEG’s only rail operation is the Essex Thameside franchise – marketed as c2c – and which has been extended to September.

NEG is to submit bids to the DfT for the new Essex Thameside franchise, and to TfL for the Crossrail franchise. It has also been selected by Transport Scotland to bid for the ScotRail franchise in April. NEG has also won two 15 year contracts to provide rail services to the Nord Rhine Westphalia government in Germany, and is planning to expand in Europe.

642/Feb 14





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