Full Year Results for the year ended 31 December 2012
National Express Group PLC (“National Express” or the “Group”), a leading international public transport group, operates bus and coach services in the UK, continental Europe, North Africa and North America, together with rail services in the UK.
Trading for the Group remained robust in 2012, as we overcame a number of challenges by focusing on improving the quality of our services and continuing to deliver on our strategy. Recent significant contract wins have demonstrated the strength of our operating expertise and future prospects.
However, the Group was unable to overcome the decline of one million in the number of elderly and disabled passengers our UK coach business carried as a result of the UK Government’s removal of its concessionary scheme. This significant drop in coach passengers has driven the year-on-year decline in Group profit.
- Third successive year of margin growth, up 150 basis points to 11.6%
- Third year of growing non-rail profit, at £185.2 million (£181.8 million in 2011)
- Delivered £34 million of cost savings in year
- Improved operational performance with industry-leading businesses
- Delivered a Group non-rail ROCE improvement of 14% over 3 years to 10.6%
- Generated £140 million of free cash flow (before rail franchise handover) and funded over £125 million of organic capital investment
- Won nearly £2 billion of new contracted revenue in the last 12 months
- Successfully integrated Petermann with annualised synergies of $10 million delivered
- Diversified our risk by broadening our product range and entering new markets
- Strong balance sheet with long-term funding maturity
- Final proposed dividend of 6.6p; total dividend for year 9.75p, up 3% year-on-year
|Year ended 31 December||2012||2011|
|Group operating profit (£m)||Non-rail||185.2||181.8|
|Share of results from associates (£m)||1.4||1.4|
|Net finance costs (£m)||(49.2)||(46.4)|
|Profit before taxation (£m)||164.1||180.2|
|Statutory profit for the period (£m)||61.3||102.6|
|Group operating margin||11.6%||10.1%|
|Net debt (£m)||828.2||633.7|
|Basic EPS (pence)||Non-rail||21.6||20.7|
|Total dividend per share (pence)||9.75||9.50|
Dean Finch, National Express Group Chief Executive, commented:
"I am very pleased with the progress that National Express Group as a whole has made, with four of our five divisions performing strongly. Our most significant challenge was the decline in National Express Coach’s elderly and disabled passengers by one million after the UK Government’s removal of its coach concession scheme. This made 2012 one of the most difficult years in National Express Coach’s 40 year history and has driven the decline in National Express Group operating profit. However, our recent contract wins in Spain and North America and selection by German authorities to run two rail contracts are an indication of the international strength of our business, something we are determined to build on in 2013.”
We are optimistic about our future prospects. We expect to deliver organic growth in four of our divisions as our combination of value for money fares and operational excellence provides a compelling passenger offer in austere times. Strong cash generation and prudent management of our debt will provide flexibility in the future. And we are determined to build on our recent contract successes in Spain, North America and Germany as we leverage our strong international business portfolio to deliver growth.
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 and External Affairs||07767 425822|
|Neil Bennett / George Hudson||020 7379 5151|
•Unless otherwise stated, all profit, margin and EPS data refer to normalised results, which can be found on the face of the Group Income Statement in the first column. The definition of normalised profit is as follows: Statutory result excluding profit or loss on the sale of business, exceptional profit or loss on sale of non-current assets and charges for goodwill impairment, intangible asset amortisation, exceptional items and tax relief thereon. The Board believes that the normalised result gives a better indication of the underlying performance of the Group.
•Operating margin is the ratio of normalised operating profit to revenue.
•Free cash flow is intended to be the cashflow equivalent of normalised profit after tax. A reconciliation is set out in the Finance section of the Report.
•Net debt is defined as cash and cash equivalents (cash overnight deposits and other short-term deposits), and other debt receivables, offset by borrowings (loan notes, bank loans and finance lease obligations) and other debt payable (excluding accrued interest).
•The EPS generated by the Rail business is calculated using the normalised operating profit of the Rail division, taxed at the UK tax rate.
Notes to editors
• National Express Group is a leading transport provider delivering services in the UK, North America and Spain. Every year more than 800 million journeys are made on our buses, trains, light rail services and coaches. The Group employs around 40,000 people and operates over 25,000 vehicles.
• Spain - Our Spanish business, ALSA, is the largest private provider of public transport operating 172 concessions covering long distance, regional and urban bus and coach services. ALSA also operates a rapidly growing bus network in Morocco.
• North America – we operate 20,000 school buses across 32 US states and four Canadian provinces, mostly through 3 to 5 year contracts with local school boards, which provide good medium term revenue visibility. In addition, we now operate transit contracts in four US states. The business is the second largest private student transport operator in North America. We also have transit operations in 6 US states.
• UK Bus - National Express is the market leader in the West Midlands, the UK's largest urban bus market outside of London. We operate more than 1,600 vehicles and cover over 70 million miles per year. We also run bus services in Coventry and Dundee and operate the Midland Metro light rail service between Birmingham and Wolverhampton.
• UK Coach - National Express is the largest operator of scheduled coach services in the UK. The business operates high frequency services linking hundreds of destinations across the country, including major cities and airports. We are the UK partner in Eurolines, the only Europewide scheduled coach operator serving over 600 destinations in 33 countries.
• UK Rail - National Express operates one rail franchise in the UK, Essex Thameside, known as c2c. It serves destinations between London (Fenchurch Street station) and South Essex and is an award-winning train operator, delivering the best performance in the UK rail industry with a record-breaking annual punctuality figure of 97% and 93% customer satisfaction according to the Autumn 2012 National Passenger Survey.