Arriva Continues Progress

Both the FTSE 100 and FTSE 250 indices more or less marked time on Thursday morning. Strength in the banking sector, after the Bank of England's Monetary Policy Committee (MPC) decided to leave the Bank Rate unchanged, was offset by weakness amongst commodity stocks. Shortly after midday the leading share index was up 5.17 points or 0.1% at 5,528.04, supplementing gains from the first three days of the week.

Dominic Turner
shareprices.com - Thursday, March 04, 2010

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Arriva

In the second tier, Arriva, one of the largest transport services companies in Europe, was a riser up 8p or 1.42% to 571p. Its performance helped to lift the FTSE 250 index 18.06 points or 0.19% to 9,630.23. The firm reported a 19% fall in pre-tax profits for 2009, down to £1.27 million, but this was in line with market expectations and it aims to increase its share of the European bus and rail market during 2010.

Indeed, Arriva said that there were signs of growth in passenger revenue from its CrossCountry train franchise, albeit not at the levels originally predicted; the franchise barely broke even last year with revenue of £328 million, compared with the £371 million forecast when Aviva bid for the franchise three years ago.

Mergers and acquisition talk involving Keolis – part of the French National Railway, SNCF – and others has surrounded Arriva for some time now; other factors in its favour include a projected £30 million saving on fuel costs, due to a policy of forward fixing and an extra £1 billion of contract work that it has taken on this year.

 

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