11th May 2016 15:24
LONDON (Alliance News) - National Express Group PLC on Wednesday said 2016 has started well even as the terror attacks which hit Brussels in March damaged revenue growth in the company's UK coach business.
National Express said total revenue in constant currencies grew 11% year-on-year in the four months to the end of April. Constant currency pretax profit also grew year-on-year, the company said, despite higher bid costs and a significant rise in the premium on the c2c franchise, which operates the London, Tilbury and Southend railway.
Underlying revenue for the group's UK coach business grew 4.0% in the period, despite a "notable reduction" in passenger numbers in the immediate aftermath of the Brussels attacks. In March, suicide bombers detonated explosives in Brussels Airport and a train station in the city, killing 32 people and injuring more than 300.
Despite the hit this delivered to National Express, passenger volumes grew 6.0% in the period and the group expects revenue growth to recover from a weak April through to the middle of 2016, based on the improvement already seen in advance bookings.
UK bus commercial revenue grew 3.0%, with passengers volumes broadly flat. National Express said its focus on partnerships with local authorities has continued to bare fruit. The UK bus unit also signed corporate transport deals in the period with companies including e-commerce giant Amazon.com Inc and Birmingham Airport.
For the c2c franchise, passenger journeys grew 7.0% on a like-for-like basis. National Express said after a surge in demand for the service following the introduction of a new timetable in December, it has now reached an agreement with the UK's Department for Transport to bring 24 carriages into service later in the year, three years ahead of schedule and at no incremental cost to National Express.
In Spain, passenger numbers grew 5.0% and revenue grew 3.0% year-on-year, driven by progress made on the company's revenue management, contract wins and the acquisition of Herranz, which operates buses in Madrid. Passenger volumes in Morocco grew 11%, with growth in all four cities National Express operates in. The group said it now carries more passengers in Morocco than it does in Spain following the growth in the first four months.
National Express also successfully mobilised its German rail operations in the first four months, with more than 6 million passengers already carried and punctuality and service levels operating ahead of the previous operator.
In North America, the School Bus bid season is well-progressed and the group has managed to retain 96% of contracts so far. Where contracts have been renegotiated or renewed, National Express said it secured an average rise in the rate it received of 5.0%.
Overall, National Express said the North American business had its best start to a year ever, partly benefiting from less weather disruption than in the past.
The group said it is making progress on clarifying its bid for the East Anglia franchise, with a decision expected in July. National Express also anticipates making a bid for the Manchester Metrolink contract in June, along with a further German rail bid.
"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," Chief Executive Dean Finch said in a statement.
"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," Finch said.
National Express shares were down 1.0% to 330.30 pence Wednesday afternoon.
By Sam Unsted; [email protected]; @SamUAtAlliance and Samuel Agini; [email protected]; @samuelagini
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