TIDMNEX
RNS Number : 7890D
National Express Group PLC
28 October 2015
National Express Group PLC
Interim Management Statement
Focus on operational excellence delivering further growth
National Express Group PLC ("National Express" or "the Group")
today reports its Interim Management Statement for the period from
1 July 2015 to 30 September ("the period").
Overview
The Group has continued its strong progress in the period.
Revenue has grown year on year in every division on a constant
currency basis over this important core summer period. Our focus on
operational excellence continues to open new market opportunities,
deliver strong cash flows and secure widespread external
recognition for us as the leader in the markets we serve.
Year to date, like-for-like Group operating profit is 6% higher
after excluding rail and Middle East bid costs on a constant
currency basis and up 16% on a reported basis. Our businesses have
performed well in the period and as we enter the final quarter, we
remain on course to deliver our cash flow target for the year and
are confident of delivering good-quality growth for 2015 as a
whole.
Highlights:
Revenue growth in every division
-- Group revenue up 3% on a constant currency basis with revenue up in every division.
-- Like-for-like Group operating profit up 7% in the period,
after excluding rail and Middle East bid costs and at constant
currency.
-- Continued excellent performance in c2c ahead of bid plan's
forecasts, with 10% growth in revenue and 5% passenger growth year
to date.
-- Record passenger numbers, the on-going successful roll out of
our Revenue Management System and continued strong growth in
Morocco have delivered increased revenues of nearly 3.5% on a
constant currency basis in our Spanish division.
-- Revenue growth in North America of 3% excluding targeted
exited contracts, resulting in further progress on our margin
improvement strategy.
-- Commercial revenue growth of 2% in UK Bus and approval for a
five year 'Bus Alliance' by the West Midlands ITA, succeeding our
existing partnership.
-- Strong revenue growth of 3.5% in our core UK Coach business,
including a record for July passenger numbers.
Delivering on new market opportunities
-- Announced as preferred bidder to operate bus services in
Porto, our first entry into the Portuguese market.
-- Won three new US transit contracts this year, taking
annualised revenues to over $100 million, an increase of over
20%.
-- Begun operating services in Khouribga, our fourth contract in Morocco.
-- We have been provisionally awarded one of three contracts
under the Spanish government's Imserso pensioner holiday scheme -
this is currently the subject of a legal challenge from competitors
which we understand will be concluded within the next few
weeks.
-- First rail service to begin operating in Germany in December;
bid submitted for another German rail contract and an active
pipeline of attractive bidding opportunities during 2016.
-- Preparing our bid for the East Anglia rail franchise, to be submitted in December.
-- Shortlisted for the Manchester Metrolink contract, with bid submission next year.
Dean Finch, National Express Group Chief Executive, said:
"I am delighted that our focus on operational excellence and
delivering for our customers is being recognised in our results,
our success in new markets and the many awards we have recently
won. Our reputation for delivering excellent services for our
customers at great value has helped us grow our business, open new
markets and generate strong cash flows and grow shareholder
returns.
"In recent months we have won or started new contracts in Spain,
Portugal, Morocco and North America and we will shortly start
running our first trains in Germany. I look forward to continuing
to build on this success in the coming months and years."
Delivering operational excellence
During the period, National Express' focus on providing
excellent services to its passengers and the communities it serves
has helped drive growth.
National Express was named as the highest ranked public
transport operator in the UK Customer Service Index.
Our rail service, c2c, continues to deliver industry-leading
punctuality and was named Passenger Operator of the Year at the
National Rail Awards. This performance helped c2c to deliver a
performance above the original bid forecasts, with revenue growth
up 10% and a 5% rise in passenger numbers year to date.
In UK Bus, a recent customer satisfaction survey by Transport
Focus delivered the best results we have ever achieved and we were
delighted to win Improvements to Bus Services for our West Midlands
operations at the National Transport Awards. This has helped
commercial revenues in UK Bus grow by 2% and secure approval for
our five year 'Bus Alliance' with the West Midlands ITA, which will
succeed our existing partnership.
UK Coach attracted record passenger numbers in July, which
helped to deliver 3.5% core revenue growth. This has been
complemented by new commercial partnerships, such as one with
raileasy.co.uk. We have secured a five year extension to our
operations at Heathrow's Central Bus Station and have strengthened
our presence at Stansted Airport through a new contract to operate
coach services to and from the airport and a new staff shuttle
contract commencing in the period.
ALSA carried record passenger numbers during the period as it
continued to benefit from the Revenue Management System put in
place last year to improve its performance against deeply
discounted rail tickets. Morocco continued its strong revenue and
passenger growth.
In North America, our continued focus on excellent customer
service has helped us maintain a contract retention rate of 99%
excluding those contracts we have chosen to exit. This has helped
drive a year on year growth in revenue.
Achieving significant success in bids and new services
We have continued to secure a series of significant new
contracts that have broadened our footprint as an international
public transport group.
We begin our first rail services in Germany in December; and
have already secured a total EUR2.6 billion worth of German rail
contracts with the RME and RRX services. We have provided the
information required by the Munich High Court to the local
authority so it can determine the award of the EUR1.4 billion
Nuremberg S-Bahn contract, with a decision expected in
mid-November. We have an active pipeline of attractive bids in
Germany during 2016.
We have been provisionally awarded one of three contracts under
the Spanish government's Imserso pensioner holiday scheme. Our
award is currently the subject of a legal challenge from
competitors which we understand will be concluded within the next
few weeks so this important scheme can begin to provide its
services. Significantly, we expect to retain our first two
concessions to come up for renewal under the new system, having
achieved the highest technical scores, demonstrating our ability to
compete under the changed arrangements.
Morocco has also maintained its strong growth and has recently
begun operating its fourth contract, in Khouribga. We believe there
are further growth opportunities in Morocco.
We have also been named preferred bidder in Porto, worth a total
of EUR500 million across the 10 years of operation. This is our
first entry into the Portuguese market and we look forward to
delivering the necessary improvements to enhance passengers'
services.
In North America our Transit business has continued to grow with
another three contracts added this year. This takes the division to
an annualised turnover of over $100 million, an increase of over
20%.
In Bahrain, our operations were fully rolled out ahead of
schedule, with a fleet of 141 buses and a smartcard system in
place. Over four million passenger journeys have been made on our
services since the start of operations in February. We continue to
believe there is further opportunity for growth in Bahrain and
other countries in the Middle East as they look to bring
international transport expertise to their local services.
In the UK we are working on our bid for the East Anglia rail
franchise which will be submitted in December and we have been
shortlisted for the Manchester Metrolink contract, with a decision
due next year.
Financial position
We remain on track to deliver our target free cash flow of
GBP100 million in 2015. We expect to close the year within our
target of 2-2.5 times net debt to EBITDA.
Enquiries
National Express Group PLC
Matthew Ashley, Group Finance
Director 0121 460 8655
Anthony Vigor, Director of Policy
and External Affairs 07767 425822
Louise Richardson, Investor
Relations Manager 07827 807766
Maitland 020 7379 5151
Rebecca Mitchell 07951 057351
There will be a conference call for investors and analysts at
0930 on 29 October 2015. Dial in details are as follows:
UK Toll Number: 02031394830
UK Toll-Free Number: 08082370030
Participant pin: 96365925#
Notes
National Express Group PLC ("National Express" or "the Group")
is a leading international public transport group, operating bus
and coach services in the UK, continental Europe, North Africa,
North America and the Middle East, together with rail services in
the UK.
Unless otherwise indicated, revenue is stated on an underlying
basis, which compares the current year with the prior year on a
consistent basis, after adjusting for the impact of currency,
acquisitions and disposals.
Like-for-like operating profit growth reflects the Group's
normalised operating profit at constant currency, after adjusting
for the impact of year-on-year movements in bid costs.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IMSLFFEIIALTFIE
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