A clear, constant strategy
Dear fellow Shareholder
Introduction and overview
I am delighted that National Express has again delivered another year of such strong growth. With revenue and profit both increasing markedly and being converted to strong free cash flow, I firmly believe that under Dean’s leadership we have established a sustainable model of growth. Equally, I am repeatedly struck by the passion, commitment and expertise of our staff across the Group in delivering the quality of services our customers rightly demand day-in, day-out.
It is particularly pleasing that these Group results have been delivered through growth across all of our internationally diversified business. North America and ALSA have both had particularly strong years delivering significant headline growth. The performance of our UK bus and coach businesses to turnaround their significant challenges of the first half of 2017, was impressive.
Our strategy of focusing on operational excellence, investing in technology and disciplined acquisition and growth in new markets has now been delivering for a number of years. As Dean makes clear in his report, while we have made important strides in each of these areas already, there are also significant opportunities to pursue. As a Board we are focused on working with and challenging the executive team to realise them.
Progress made with opportunities ahead
Our credentials as an industry-leading operator are strengthened every year. Our achievement of the highest safety awards, attainment of the highest European Foundation for Quality Management five-star rating in three businesses and consistently high customer satisfaction scores are testament to a focus on the fundamentals of a transport business that is geared for ongoing success.
Equally, however, when one stands back it is clear that we are in both a period of significant technological change and also an era when the potential application of these myriad innovations is presenting challenge, yes, but also exciting opportunities. This is now perhaps one of the most pressing challenges for a business like National Express: how we focus our investment and resources in the area of technological innovation to deliver the greatest benefit for our customers and shareholders.
From our industry-leading on-demand scheduling technology at Ecolane, through our pioneering use of smart Lytx DriveCam safety cameras, to our sophisticated customer pricing and payment methods (such as Revenue Management Systems) National Express has sought to invest to embrace the opportunities at an early stage. With the promising results from these – and other – investments, the Board and executive team both believe we are at the start of something exciting here.
Our disciplined acquisition strategy also continues to prove successful, as both high quality new businesses generating returns of at least 15% are brought into the Group, but also opening additional new growth avenues. As Dean again sets out in his report, the emerging urban growth model in Geneva and in major cities in North America has been driven by our recent acquisitions.
Our determination to continue to grow our existing businesses through the excellence and technology agendas, and these new avenues for expansion, provide us with confidence and optimism for future growth.
It is with this in mind that the Board has again recommended a 10% increase in the final dividend, bringing the full year dividend to 13.51p. Subject to shareholder approval, this will be paid on 21 May 2018 to shareholders on the register on 27 April 2018.
Finally, I would like to thank Dean and everyone at National Express for their continued hard work and commitment to the business and its core values.
Sir John Armitt
1 March 2018