TIDMNEX
RNS Number : 4044E
National Express Group PLC
18 October 2018
18 October 2018
GOOD TRADING IN KEY SUMMER PERIOD
National Express Group PLC (or "the Group") today reports its
Trading Update for the period from 1 July 2018 to 30 September
2018.
Dean Finch, Group Chief Executive said:
"We had a good summer's trading, with our UK coach business in
particular delivering outstanding organic growth. Group revenue and
profit are up strongly and we are carrying more passengers. We
expect this momentum to continue in our traditionally quieter
fourth quarter.
"With Spanish concession renewals further delayed, a major
contract starting during 2019 in Rabat and encouraging pricing
trends in North America, our outlook is positive. Our continued
focus on cashflow and operational performance should allow us to
continue to grow profit in the years ahead."
Group highlights
A good summer's trading, with outstanding UK coach, and
particularly strong Spanish division, performances. The Group
performed strongly:
-- Group revenue was up 9.5% in reported terms (8.9% in constant currency);
-- Group Profit Before Tax (PBT) was up 18.3% in reported terms (10.7% in constant currency);
o Year to date Group PBT is up 14.5% in reported terms (16% in
constant currency);
-- Group margin is also up year-on-year.
We expect to continue this positive momentum in the medium term
as:
-- Spanish concession renewals are still paused. We do not
believe there will be any impact from renewals in 2019 and each
passing week further reduces any impact in 2020;
-- Our significant Rabat urban bus contract starts in mid-2019,
making us Morocco's largest transport operator. This joint venture
will operate nearly 500 buses and is expected to secure around EUR1
billion of revenues and a typical ALSA operating margin, with the
full earnings benefit felt from 2020;
-- It is increasingly apparent that our North American School
Bus customers with the highest satisfaction score are not only more
likely to retain us, but also more willing to pay a premium for
quality services. Half of our customers are currently on this
highest satisfaction score and a programme to move more into this
group has started;
-- Moody's has recently upgraded our investment rating to Baa2.
Divisional highlights
UK: a strong summer, with coach especially showing outstanding
organic growth
-- Strong trading performances in both our bus and coach
businesses have delivered accelerating divisional revenue growth of
5.3%.
-- UK coach performed outstandingly in its key summer period:
o Core revenue increased by 10.1% and passenger numbers grew by
6%;
o On a like-for-like basis, UK coach revenue was up 9.4%;
o Core coach took over GBP5 million in revenue for every week in
August, for the first time ever; August bank holiday Monday's
revenue was up 13% alone.
-- We acquired Stewarts in mid-September, a high-quality coach
business. This acquisition: expands our B2B operations amongst blue
chip companies in the fast-growing M4 corridor; provides further
opportunities in the in-bound tourist market, to complement our
Clarkes of London services; and, provides synergy benefits with
existing coach operations.
-- UK bus saw commercial revenue increase by 1.1% and passengers grow by 0.5%:
o Commercial revenue per mile increased by 4.1%.
-- M-tickets continue to grow strongly, with further evidence
they are driving extra journeys on our services. We remain on-track
for our projection of 70% of revenue through digital methods by the
year end.
ALSA: a strong summer, with growth across the board and
continued expansion in new markets
-- Revenue increased by 15% in constant currency:
o Organic revenue growth was positive at 4.1% in Spain and 2.9%
in Morocco.
-- Passenger numbers for the division grew by 5.7%.
-- All segments grew revenue and passengers. Long haul returned
to growth with revenue and passengers up 3.7% and 2.2%,
respectively.
-- New Geneva hub continues to grow strongly with -
significantly - our first local tenders won:
o A focus on new summer tourist routes has driven revenues up by
26.7% in AlpyBus;
o We secured contracts for two small urban bus services in
Geneva, to add to and complement our existing presence.
-- Our urban minicab services continue to perform strongly,
providing a platform for both multi-modal integration and
growth.
North America: a strong start to the new school year,
complemented by a significant transit win
-- Revenue increased by 6.9% in constant currency.
-- The business was well controlled over the traditionally
quieter summer period, with the recent improved pricing starting to
be felt in the fourth quarter.
-- A good return to school performance saw us secure organically
an additional 167 routes in September.
-- We won our largest ever transit contract secured through open
competition. The 115 bus operation in San Bernardino, California,
is our 7(th) contract in the state. It has already started and is
due to run for 5 years, securing nearly $20 million in annual
revenue:
o We also secured two further smaller contracts that advance our
complementary market growth. First, a bus shuttle contract in
Chicago, run from an existing operating site. Second, a contract
which expands our operations in the fast-growing Charter School
market;
o Working with our Ecolane scheduling software business, the
Transit division has also won a small on-demand contract to provide
ride-sharing services in Stockton, California. This complements our
existing services in the area and we hope will provide a proof of
concept for other transit authorities across the country.
Enquiries
National Express Group PLC
Chris Davies, Group Finance Director 0121 460 8655
Anthony Vigor, Director of Policy and
External Affairs 07767 425822
Louise Richardson, Head of Investor
Relations 07827 807766
Maitland/AMO 020 7379 5151
James McFarlane 07584 142665
There will be a conference call for investors and analysts at
0900 on 18 October 2018. Dial in details are as follows:
UK Toll Number: +44 33 3300 0804
UK Toll-Free Number: 0800 358 9473
URL for international dial in numbers:
http://events.arkadin.com/ev/docs/NE_W2_TF_Events_International_Access_List.pdf
Participant pin: 27176362#
Legal Entity Identifier: 213800A8IQEMY8PA5X34.
Classification (referencing DGTR6 Annex 1R): 3.1.
Notes
All revenue, profit and margin data are based on the Group's
continuing operations and refer to normalised results, which
exclude intangible amortisation for acquired businesses and profit
for the period from discontinued operations. The Board believes
that this gives a more comparable year-on-year indication of the
operating performance of the Group and allows users of this
information to understand management's key performance
measures.
Unless otherwise stated, financial data are presented on a
constant currency basis, comparing the current period's results
with the prior period's results translated at the current period's
exchange rates. The Board believes that this gives a better
comparison of the underlying performance of the Group.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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