NatEx revenue growth
In its pre-close trading update for the six months ended 30 June 2013, National Express Group reported trading was in line with expectations. Total revenue during the period has grown by 7% at constant currency. It believes it has made strong progress in its three core areas of focus: Organic growth and operational excellence: Cash generation and Business development. The company’s UK Bus division experienced a weak first quarter for passenger volume, which it claims reflected the poor weather and the impact of austerity measures. However, the second quarter has seen a turnaround in patronage. Commercial passenger volumes have grown and the reduction in the number of concession passengers all but eliminated. As a consequence, network mileage is broadly flat and like-for-like revenue has increased by 3%. Despite higher fuel and pension costs in 2013, with the reduction in BSOG already accounted for, the business’s outlook for the remainder of the year is positive. Operational performance was described as excellent with record levels of punctuality attributed to its investment in vehicle tracking systems. Fleet investment continues, with 90 new vehicles delivered so far this year.
In National Express’s UK Coach division, core revenue rose 3% in the first half of the year. Its focus on low fares is thought to be proving attractive to consumers and driving volume growth. This has been supplemented by the successful launch of its Luton Airport services and additional passengers booking through its Ryanair marketing agreement. Growth in Eurolines and a new Airlinks contract have offset weak rail replacement revenue, which followed the cessation of its East Anglia franchise.
Group Chief Executive, Dean Finch, said, ‘I am pleased with our revenue improvement across the business, reflecting the attractive value and quality service we offer our customers. I believe that the combination of organic growth and operational excellence, cash generation and new international contract opportunities will drive returns for National Express and our shareholders.’