25th Feb 2016 13:08
LONDON (Alliance News) - National Express Group PLC shares rose on Thursday after the public transport company posted a big rise in pretax profit in 2015 thanks to a lack of one-off costs and said trading had been positive across the business, with revenue and margins all improving.
The stock rose up 8.8% to 321.4 pence on Thursday afternoon, one of the best performers in the FTSE 250.
The bus and rail services operator said pretax profit rose to GBP124.4 million in the year to the end of December, an 87% rise on the GBP66.5 million it posted in 2014, when it was hit by one-off costs. National Express will pay a final dividend of 7.645 pence per share, up from 6.95p, taking its total dividend to 11.33p, a 10% rise on the 10.30p it paid out a year earlier.
Revenue rose 2.8% to GBP1.92 billion from GBP1.87 billion, driven by good trading in National Express's bus and coach operations in the UK and US, along with the start of new rail contracts in Germany and a bus deal in Bahrain.
The company said it had a good first year running the c2c rail franchise in Essex, with record passenger numbers and good customer satisfaction scores, and was boosted by the start of its Bus Alliance agreement secured with local authorities in the West Midlands, a programme designed to increase bus usage in the region and boost investment in highway infrastructure.
In North America, the school bus bid season was successful, National Express said, with an average price increase of 2.8% across its contracts, offsetting wage inflation it has had to absorb. Profit also increased in its UK coach business, helped by strategic partnerships and good revenue management.
National Express also achieved record passenger numbers at its ALSA subsidiary in Spain and Morocco, helped by significant growth in the latter.
The group said it has entered 2016 in a strong position, with revenue, profit and margins up in all divisions and the company delivering strong and sustainable free cash flow.
National Express said it expects a decision on the East Anglia rail franchise in the UK in July, having submitted a bid for the contract in December, and noted it won the Rhine Ruhr Express contract in Germany in 2015, which should further boost revenue in the coming year. ALSA won the Imserso contract for pensioner travel in Spain in the year.
National Express said it is working on three further bids for German rail services and is developing a bid for the Manchester Metrolink tram system, with submission for this contract due in May.
"This strong set of results demonstrates that our focus on operational excellence is generating excellent returns for our shareholders and customers. I am pleased that every division has increased revenue, helping to drive overall group profit growth and another strong free cash flow performance," said Chief Executive Dean Finch.
"We continue to draw on our international reputation for operational excellence to expand new market opportunities. We have an active pipeline of bids within Europe and the Middle East that will continue to deliver new growth opportunities," Finch added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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