National Express Group reports revenue increase across all operations

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National Express Group PLC has reported growth across the board in its Interim Management Statement released on May 11, 2016. The report spans the period from January 1, 2016 to April 30, 2016.

The Group said that it has made a strong start to the year, with total revenue up 11% in the period on a constant currency basis – this includes the benefit from acquisitions and the start of German rail operations in December 2015. After adjusting for these new operations, revenue was up 4%.

All divisions have reportedly achieved an increase in revenue, which the Group said is supported by total underlying passenger growth of 3% across the Group. It states that it remains on target to deliver profit expectations and free cash from and leverage targets for the year.

Among growth in the Group’s rail operations and services in other countries, it has reported that the UK Bus division has seen commercial revenue growth of 3% – and this demonstrates that its partnership-based strategy continues to yield results.

UK Coach operations have also seen an underlying revenue growth of 4%, achieved despite a notable drop in passenger numbers following late March’s terrorist attacks in Brussels. Despite this, passenger volumes are reported to have grown by 6% in the period. Revenue growth is expected to recover through to the half year mark based on improvements seen in advance bookings, the Group said.

Passenger and revenue growth is also stated to have grown in National Express Group’s operations in Spain, Morocco and North America – the latter of the three in school bus services. Future plans include preparing to submit bids in June for Manchester Metrolink; corporate transport agreements between the UK Bus division and, amongst others, Amazon, Jaguar Land Rover and Birmingham Airport; and the progression of a clarification phase in an East Anglia bid, on which a decision is expected in July.

UK Bus has signed corporate transport agreements with, amongst others, Amazon, Jaguar Land Rover and Birmingham Airport.

Dean Finch, Group Chief Executive, commented: “I am pleased that we have carried our strong momentum from 2015 into the first third of this year, achieving growth in passenger numbers and an increase in revenues across all divisions.

“Our established businesses continue to grow, year-on-year, and our new businesses in Germany and Bahrain are already carrying millions of passengers, through a combination of innovation, partnership and customer service, underpinned by a relentless focus on operational excellence. We also believe this experience helps position us well for other emerging opportunities.

“It is these successes that convince us that our strategy of diversification into new markets in a measured way, when the conditions are right, remains the right one. We are building a business with a balanced risk profile and limited exposure to individual contracts. In North America, for example, over 90% of our revenue comes from contracts we have held on average for more than 10 years and where we wish to retain these contracts, we have consistently secured a success rate in excess of 95%. We will also continue to seek out long-term and capex-light opportunities which meet our strict financial criteria. We remain on track to meet our full year profit and cash flow expectations.”