The National Express Group (NEG) has released its trading update for the period of 1 January 2020 to 31 March 2020.
Covid-19:
Sadly, NEG lost two employees to Covid-19, and are supporting their families. NEGs businesses have sought to step-up and provide crucial new services that are helping keyworkers or the most vulnerable during the crisis:
- In the UK (through National Express Accessible Transport (NEAT) and in North America (through our school bus drivers) we are delivering food packages to vulnerable groups;
- In North America we are helping to distribute learning materials to students at home;
- In Dundee and the West Midlands in the UK and Cantabria in Spain, our bus services are free for health workers travelling to and from work;
- In the UK, NEAT is also running shuttle buses to and from hospitals from train stations across the West Midlands;
- ALSA has made spare fleet available to the Spanish Emergency Military Unit (EMU). So far it’s been taken up by the EMU in Madrid, Leon and Sevilla;
- And finally, Helio Garcia, a driver trainer from Aviles, Spain is manufacturing face masks from home for local hospital workers and police.
Business update
UK Services continue to operate at much lower volumes:
- NEG are running 46% of our West Midlands bus operations, after agreement with Transport for West Midlands, to sustain an emergency key worker network;
- All National Express coach services were temporarily until further notice from 5 April 2020
All variable costs have been reduced in-line with service reductions; The suspension of NEGs coach network allows them to significantly reduce their costs of operations whilst demand is so low, thereby strengthening the Group’s overall operating cash position; All capital expenditure is on hold.
NEGs cash flow position has strengthened since our 19 March 2020 statement, where we said we expected our cash flow to be positive over the next three months.
NEG have secured a further £800 million of additional facilities, including £600 million from Her Majesty’s Treasury’s and the Bank of England’s Covid Corporate Financing Facility (CCFF). We now have over £200 million of cash on deposit and in addition, undrawn committed facilities of over £1 billion. These extra facilities provide NEG with further security through all foreseeable scenarios during this temporary shutdown.
The Board recognises the importance of a dividend to its shareholders but equally balances this with the exceptional circumstances that the Covid-19 pandemic represents. Given these exceptional circumstances, the Board is withdrawing its recommendation to our shareholders to declare a final dividend for the year ending 31 December 2019. As such, the resolution proposing the declaration of the final dividend in the Company’s Notice of 2020 AGM will not be put to the vote at the AGM. The Board will keep future dividends under review and will restart payments when it is appropriate to do so.
All members of National Express PLC Board have volunteered pay sacrifices in light of the pandemic.
Dean Finch, National Express Group Chief Executive, said: “I would like to pay tribute to our two colleagues who have tragically lost their lives to Coronavirus. They were much respected colleagues and will be sorely missed. We are providing their families with support during this very difficult time. Equally, we pass on our best wishes to other colleagues suffering from the virus and hope for their safe recovery. Our priority remains protecting the safety of our colleagues and customers. I am particularly proud of the excellent work my National Express colleagues are doing during this exceptionally difficult period.
“We continue to make important progress in dealing with the impact of the pandemic across our businesses. We are combining self-help with productive discussions with customers, national governments and relationship banks. We are also determined to play our part by continuing to provide essential services where they are still needed. This pandemic has reinforced the absolutely fundamental and essential role our services play in the communities we serve. With their exceptional actions, governments and authorities have clearly recognised this as well.
“National Express went in to this crisis with revenue up strongly across the Group. I remain confident that we will emerge out of this unprecedented period with our portfolio of strong assets ready to return to delivering industry-leading service to our customers.”
