Strong overall growth offsets UK Bus slowdown at National Express

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National Express Group has released its full year results for the year ended December 31, 2016, with a lagging UK Bus division covered by excellent performance elsewhere.

Group revenue rose from £1.75bn to £2.10bn, representing an increase of 10.6% on a constant currency basis. Operating profit was up 4.8% at constant currency, at £219m.

The group’s statutory profit for the year stood at £120m, a 10% increase on 2015. Statutory earnings per share were up by 10% at 23p.

Growth was fuelled in North America, with revenue and operating profits up 14.3% and 11.9% on a constant currency basis, thanks to a successful bidding season. The company also saw record passenger numbers in Spain and Morocco, supporting revenue growth of 5.7% and operating profit growth of 5.3%.

The UK Coach business performed well, with a small 0.6% revenue increase delivering a profit increase of over 3% at a margin of 11.8%. Rail strikes helped to boost demand, with around 25,000 additional passengers on routes covering the Southern Rail area.

The UK Bus division did not perform as well. Commercial revenue was up 2%, but offset by an expected decline in concessionary income to balance out at 0.1% growth overall. Operating profit declined by 5.3%, with margins decreasing from 13.1% to 12.4%. The operator said a combination of congestion and changing travel patterns affected its revenue and profit.

Dean Finch, National Express Group Chief Executive, said: “We have again delivered a strong set of results from our diversified group of international businesses and remain confident for our future prospects.

“Our focus on operational excellence is helping drive organic growth across the Group, and this is being complemented by significant returns from our recent acquisitions. We carried a record 921 million passengers in 2016 and will continue to invest in new technology to deliver ever-improving services to our customers.

“With the recent sale of our c2c franchise, we have further opportunity to invest in our fastest growing markets which deliver strong returns, but we will continue to do so in a disciplined manner. We have developed a strong track record and team in identifying and completing acquisitions that generate significant value and we have identified a strong pipeline of further opportunities.

“Our confidence in the future is demonstrated by the increase in our annual free cash flow guidance to £120m and the proposed 10% increase in the final dividend.”