NatEx’s ‘strong financial performance’
In its results for the year ended 31 December 2013, National Express has delivered what it describes as a ‘strong financial performance’. Group revenue increased 3% to £1.89bn (2012: £1.83bn), with 7% growth in total non-rail revenue. Its normalised Group profit before tax was ahead of target at £143.7m (2012: £164.1m). The decline reflects the handover of the National Express East Anglia Franchise during 2012.
National Express’ UK coach business achieved revenue growth of 3% to £263.5m (2012: £255.1m). Its operating profit increased to £24.5m (2012: £20.6m) and its operating margin went up to 9.3% (2012: 8.1%). Excluding the one off profit in 2012 from Olympics contracts, the underlying profit improvement was over £6m, an increase of 30% year on year. According to the operator, giving passengers easy access to lower fares, more frequent and punctual services, investment in new coaches and greater cost efficiency all contributed to this progress.
In its UK bus business, National Express’s revenue increased 2% to £273.4m (2012: £269m), but experienced a decline in operating profit to £31.2m (2012: £34.1m) and operating margin 11.4% (2012: 12.7%). The reduction was attributed to a change in pension accounting standards and BSOG cuts. It said revenue growth and cost efficiency more than offset other headwinds, including higher fuel costs. During the year, it improved punctuality 7% and reduced customer complaints by 12%. It claims its network improvements have driven patronage growth by over 10% in north Birmingham, supported by new buses, high profile marketing and strong branding on key corridors. Passenger volumes rose by up to 5% in Wolverhampton and Coventry following network reviews. Overall network mileage increased, examples being close working with Jaguar Land Rover and the Merry Hill shopping centre to meet new demand. Over 130 new buses were added to the network and new programmes, such as city centre vehicle turnaround cleaning, have been well received.
National Express Group Chief Executive, Dean Finch, said, ‘National Express has made important progress in 2013. These results show how we have been able to address the headwinds facing the Group at the start of last year. We beat our targets, especially on free cash flow, and have raised the dividend to reflect our confidence. I am particularly pleased with the strong growth in UK Coach, following its difficult year in 2012, and our performance in North America. We also made important strides in business development during 2013. We entered new markets, most significantly Germany. We have won important new contracts and are shortlisted for a number of rail franchises in the UK and Germany. We entered 2014 actively working on a £10bn pipeline of opportunities.’