News Column

National Express "On Track" For Full-Year Earnings Expectations

May 13, 2014

Alice Attwood

LONDON (Alliance News) - National Express PLC said Tuesday that trading since the beginning of the year has been positive, with the firm on track to deliver on its earnings expectations for the full-year, supported by growth across its UK divisions.

The international public transport company saw group revenue rise 2% on a constant currency basis as its UK divisions delivered strong growth on increased passenger demand.

Elsewhere, underlying revenue in ALSA, its Spanish subsidiary, declined 1%, though National Express reports signs of improved consumer confidence in Spain and continued growth in Morocco. Underlying revenue in North America rose 2%, buoyed by continued progress in its programme to enhance capital returns.

In an interim management statement for the period January 1, 2014 to date, National Express said that it faced specific challenges in its Spain and North America businesses; North America was adversely impacted by severe weather, though the firm said the majority of "snow days" are expected to be recovered in the second quarter, while ALSA experienced strike action which affected its Madrid urban operation.

UK Bus like-for-like commercial revenue grew by 3%. Good growth in commercial passenger volume, also up 3% in the period, reflected improved service delivery, with better punctuality and fewer complaints.

The UK Coach business also performed well, with core express revenue growth up 9% and passenger volume up 9%. National Express said that fares are "attractively priced, journey times are faster and punctuality has risen through our investment in network control and real-time vehicle tracking."

Rail revenue also rose during the period, up 4%. The firm has submitted bids for all three of the UK rail franchises for which it was shortlisted - Essex Thameside, Crossrail and Scotrail.

Looking ahead the FTSE 250-listed firm said it is delivering cost efficiencies across the group which, "together with strong UK growth, are expected to recover the profit impact of these events within 2014 and benefit long-term profitability."

National Express is also focusing on developing its pipeline of contract opportunities during the course of 2014; so far the firm has retained a number of key contracts in current businesses in Europe and North America, submitted bids to win new business in existing markets, and opening up new international opportunities, it said.

"We are on track to deliver the Board's expectations for the year. While we have faced specific challenges... we have taken substantial steps to address their impact, including a renewed focus on cost efficiencies. We are also driving our strategy to develop opportunities in existing and new markets and I am particularly pleased by our progress in the UK, especially the increase in the number of passengers travelling with us... Our cash generation remains strong and I believe we have the right strategy in place to deliver substantial value for our shareholders," said Dean Finch, Group Chief Executive.

Shares in National Express were trading 1.31% higher at 277.9 pence per share Tuesday morning.

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Source: Alliance News

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