Pre Close Statement
National Express Group PLC ("National Express" or "the Group"), the international public transport operator, today updates on trading for the first half year ending 30 June 2011, ahead of its Half Year Results which are scheduled to be announced on 28 July 2011.
The first half year has seen National Express achieve success in executing the first three phases of its strategy, set out at the 2010 year-end results:
(1) Margin recovery - now in the second year of the programme, the Group remains on course to improve significantly financial performance in 2011, with margin improvement across all businesses;
(2) Organic growth - revenue growth across all five divisions reported in the first quarter IMS has continued through the first half;
(3) Targeted expansion - new contracts have been won in North America and Spain.
Dean Finch, Group Chief Executive, commented:
"Building on our encouraging revenue growth in the first half year, I expect National Express to deliver a significant improvement in financial performance this year, in line with current market expectations. Continued cost control has been increasingly supported by organic growth and targeted bid success. We are well placed to deliver industry leading margins, leverage further growth opportunities and explore additional value-creating possibilities."
In Spain, passenger revenue in the first half year has increased by 7%. The challenging domestic economic environment and higher fuel costs have enabled Alsa to leverage its competitive value position versus car and rail. The Intercity division continues to see growth, particularly on routes from Madrid. In the Urban division, robust growth continues, especially in Madrid and Morocco. This has more than offset weaker revenue in non-transport operations and Moroccan tourist services.
Revenue has increased by 8%. A successful bid season last year, which saw 700 net routes added from September 2010, has been supplemented by a return to organic growth in existing school board contracts and initial success in growing charter market share. From January 2011, an additional 200 routes, secured through the Vogel acquisition, have added further growth.
The Group has had another successful bidding season in 2011. As this comes to a close, almost 600 routes have been added on a net basis. With seven conversions and a 98% retention rate, this demonstrates the strength of the renewed platform in North America.
Against a continuing weak regional economic backdrop, the UK Bus recovery plan has delivered further revenue growth through yield improvement, combined with targeted network optimisation and margin improvement. Commercial revenue in the West Midlands has grown by 6%, more than offsetting a small decline in concessionary fares, following changes to the nationally funded scheme.
UK Coach performance is starting to reflect the structural improvements implemented by the new management team. Revenue growth of 7% in the core express network reflects the brand's excellent value-for-money fares, supported by targeted marketing expenditure and a focus on improving customer service. Revenue grew in each of the core operating segments, with additional airport and London routes driving new opportunities. Although lower contract volume impacted Airlinks and Kings Ferry, the Eurolines business has continued to deliver good growth on key European routes. The Group expects the coming peak period summer months to drive further robust growth.
Strong volume growth in the UK Rail business delivered a 7% increase in passenger revenue with both the East Anglia and c2c franchises performing well. Both franchises are delivering high levels of operational performance, with c2c achieving the fourth successive period of best UK rail punctuality (PPM) at 97.5%. East Anglia continues to deliver its programme of rolling stock investment on time and within budget, supporting further growth for the remainder of the franchise. c2c is investing further in its quality framework to improve the Group's access to future rail opportunities.
National Express Group PLC
Jez Maiden, Group Finance Director 0121 460 8657
Stuart Morgan, Head of Investor Relations 0121 460 8657
Maitland 020 7379 5151
All references to revenue, operating profit and margin are measured 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, disposals and rail franchises no longer operated.