National Express's revenues rise

published 1 May 2012

Transport group National Express enjoyed good overall revenue growth in the first quarter, despite a slightly mixed bag of results.

In the UK, the bus division remains strong, growing four per cent year-on-year, with operating profit up two per cent, like-for-like (LFL) passenger volumes stable and student travel cards on the rise. 160 new buses are being added in the first six months of 2012, with funding for a further 31 hybrid vehicles recently secured from government.

In the coach division, the company has been dealing with the lower profit caused by the loss of £15m of annual concession revenue, withdrawn by the government in November 2011, the progress of which has been slower than expected. Total concessionary revenue was down £2.8m year-on-year, a reduction of 40%.

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Sale of the firm's own concessionary cards has grown, albeit at a slower rate, with 100,000 cards already sold and alterations made to the scheme to extend it to include local airports, which has doubled that weekly rate of card sales. LFL revenue in the division has grown five per cent, including three per cent volume growth reflecting increased schedule frequency.

In UK rail, the c2c division's revenue leapt 10% during the quarter and improved its punctuality performance to 96.8%.

In Spain, Alsa saw its revenues (in local currency) grow by five per cent year-on-year, driven in part by passenger volume growth on Madrid radial routes and in Northern Spain. Revenue in the urban bus operation in Spain grew four per cent while Morocco grew nine per cent, reflecting the start-up of an additional contract in Agadir. Total divisional revenue was one per cent higher, with continuing weak non-transport revenues.

School bus revenue in North America rose six per cent in local currency, partly the result of contracts won during 2011.

"The 2012/13 bid season has started successfully, with ten new contracts secured from competitors, offset by five given up. A small acquisition was completed in March adding 300 buses," the company said. "Conversion activity is progressing, with one new contract already secured. In total, we have secured over 400 net new buses for the next school year."

Overall the company is performing in line with expectations and is committed to maintaining a net debt gearing ratio of 2.0 to 2.5 times EBITDA (earnings before interest, tax, depreciation and amortization).