National Express full year results

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Coach and bus divisions both see significant passenger and revenue growth

National Express Group’s full year results for the year ended December 31, 2014, have been released.

Group revenue increased 2% to £1.87bn on a constant currency basis, though it was down 1% on a reported basis (2013: £1.89bn)

Group normalised operating profit increased by 4% to £193.1m on a constant currency basis; up £0.2m on a reported basis (2013: £192.9m)

Passenger revenue in the group’s UK Coach division was up 4%, at an operating margin over 10%, while UK bus saw a 0.6% increase in commercial passengers and 2.8% increase in revenue.

> UK Bus

UK Bus delivered a strong performance with revenue growth driven by a combination of increased passenger volume and price inflation.

Total revenue stood at to £281.0m (2013: £273.4m) with like-for-like commercial revenue growth of 3%. In the West Midlands, commercial passenger journeys rose by nearly 1% in the year, whilst concession and other income increased by 3%.

Normalised operating profit was strong, with growth of 9% to £34.0m (2013: £31.2m), reflecting both revenue growth and cost efficiencies. The operating margin has now risen to 12.1% (2013: 11.4%).

> UK Coach

UK Coach saw profit growth of 36% since 2012 (£20.6m). Total revenue increased by 4% to £275.2m (2013: £263.5m). Core network revenue increased by 4%, with new partnership agreements and dynamic pricing achieving passenger volume growth. This was supported by a strong performance at The Kings Ferry, where revenue increased by over

20% as it successfully grew its contract hire business.

Normalised operating profit increased by 14% to £28.0m (2013: £24.5m) and operating margin showed a further increase following on from the strong gains in 2013, rising to 10.2% (2013: 9.3%).

> Group Chief Executive’s review

Dean Finch, National Express Group Chief Executive, said: “National Express has made significant progress over the past year. Every division is carrying more passengers and has grown revenue. We have successfully retained key existing contracts, recently won another two rail contracts in Germany and this month started operating our Bahrain bus contract. I am particularly pleased with our very strong cash performance, which has again exceeded our target.

“National Express has delivered a good performance in 2014 with Group revenue up 2.3% on a constant currency basis and both statutory and normalised profit before tax also up on a constant currency basis by 10% and nearly 7% respectively. Our free cash generation remains very strong, again beating our target for the year and during the course of the year we have reduced net debt by over £80 million. We renewed a number of key concessions in the year and also successfully expanded our business into new markets.

“This performance demonstrates both the resilience and strength of our businesses. We have had to overcome significant challenges from the first half of the year, especially poor weather in the US, strike action in Spain and significant currency headwinds. Together these challenging events reduced profits by £5m at the half year. To have recovered from this position and delivered such a strong second half of the year is a particularly pleasing result.”