Pre-close trading update
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 2012.
The Group continues to see revenue gains in all of its businesses, other than UK Coach, driven by organic growth, new contract wins and the successful integration of recent acquisitions. Overall trading in the period has been in line with the Board's expectations.
Dean Finch, Group Chief Executive, commented:
"We focus on providing highly frequent, reliable services at low prices, making them attractive to our customers in these difficult times. We continue to invest in new fleet, better customer services and leading technologies in order to develop a sustainable base for future growth. Our diverse businesses offer multiple opportunities for expansion and we are making good progress in replacing the East Anglia rail franchise earnings and UK Coach concessionary grant."
Alsa's performance has continued to be resilient, providing essential mobility to Spanish consumers facing a challenging environment. Transport revenue increased by 5%, with intercity coach growing 3%. Urban bus revenues in Spain are mostly contracted and have been robust, growing year-on-year by 6%. Urban operations in Morocco continue to expand at nearly 20%. With our lower margin ancillary businesses seeing reduced activity, overall revenue for Alsa will be up 2% in the first half year.
We continue to manage outstanding receivable balances from Spanish state bodies effectively, whilst also benefitting from the central government scheme to clear the backlog of municipal debts. By the end of May, state receivables had reduced by €12 million since the end of 2011 to less than €45 million.
Total revenue has increased by 10%, underpinned by a strong book of long term contracts with school boards and municipalities. Acquisitions during the period added revenue of US$36 million, with the integration and synergies from the Petermann school bus business progressing to plan, and our new para-transit operations in Massachusetts and Ohio performing well. The Durham and Stock school bus businesses grew revenue by 2%. A strong 2012/13 bid season has seen contracts for over 1,200 new buses added, including six conversion contracts, together with a small acquisition, 98% contract retention to date and net bus growth of over 750.
Growth in travelcard sales and from new fleet deployment continues to drive commercial revenue, which was 4% higher. The adverse impact of the reduction in fuel duty relief from April 2012 is being successfully mitigated. The previous reduction in concessionary settlement resulted in overall revenue increasing by only 2%, but a new three year concessionary travel scheme has now been secured, which will see inflation-linked increases benefit the business going forward.
Initiatives to offset last year's removal of the Government's senior citizen concession scheme have delivered underlying core network revenue growth (excluding concessions) of 2%. Concessionary income remains approximately 40% lower year-on-year. With Eurolines continuing to grow from its attractive fares for cost-conscious European passengers, overall divisional revenue will be 2% lower than prior year.
c2c continues to perform strongly with revenue 7% higher and the franchise maintaining its industry-leading punctuality performance. The Group is well underway with its work on bids for the Essex Thameside (c2c) and Great Western franchises, following our success in prequalifying for both competitive tenders earlier in the year.
In addition, the Group has pre-qualified for its first, smaller-scale German rail franchise bids. This fits the Group's strategy of expanding into adjacent markets in Europe and North America, leveraging its experience in existing markets. The Board believes these represent an interesting opportunity for growth.
The Group will announce its Half Year Results on Thursday 26 July 2012.
National Express Group PLC
Jez Maiden, Group Finance Director 0121 460 8657
Stuart Morgan, Head of Investor Relations 0121 460 8657
Anthony Vigor, Director of Policy & External Affairs 07767 425822
Maitland 020 7379 5151
There will be a conference call for investors and analysts at 0830 on 28 June 2012. Details are available from Laura Dean at Maitland.
Revenue is measured on an underlying basis, comparing forecast revenue for the 6 months ending 30 June 2012 with the prior year on a consistent basis, after adjusting for the impact of currency, acquisitions, disposals and rail franchises no longer operated.