Full Year Results for the year ended 31 December 2015
National Express delivering growth in all divisions
With revenues, profits and margins up in every division and a growing dividend underpinned by a strong and sustainable free cash flow, the Group enters 2016 in a good position. Our strategic focus on consistently delivering operational excellence to drive returns and generate new business opportunities has continued to secure good growth and market expansion in our existing businesses. At the same time, our successful entry into new markets has also demonstrated the significant future growth opportunities for the Group which complement the progress made in our established markets.
|FY 2015||FY 2014||Change||Change at constant currency|
|Group normalised operating profit||£193.5m||£167.6m*||+15.5%||+18.2%|
|Group normalised PBT||£150.1m||£119.9m*||+25.2%||+29.3%|
|Group statutory PBT||£124.4m||£66.5m||+87.1%|
|Group statutory PAT||£109.1m||£60.6m||+80.0%|
|Free cash flow||£111.0m||£164.8m*||(£53.8m)|
|Full year proposed dividend||11.33p||10.3p||+10.0%|
* FY2014 normalised results restated to adjust for the impact of Rail and Middle East bid costs previously treated as exceptional costs
Our focus on operational excellence continues to deliver results
- An excellent first full year of the new c2c franchise, including being named Passenger Operator of the Year and record passenger numbers, drove revenue growth of 9.5%
- A five-year “Bus Alliance” secured with local authorities in the West Midlands, a first for the UK. This award winning and industry-leading approach to partnership has helped drive 10.3% growth in operating profit
- Successful North American School Bus bid season, with an average price rise of 2.8% across all contracts, off-setting wage inflation. Further progress on new acquisitions, with five made in the year
- UK Coach’s further development of sophisticated marketing and revenue management, coupled with new strategic partnerships, saw operating profit increase by 15.4%
- A record year of passenger numbers in ALSA, with the Spanish revenue management system and further significant growth in Morocco both helping operating profit increase by 5.8% on a constant currency basis
This focus is driving strong returns and free cash flow
- Free cash flow of £111 million, £11 million ahead of target
- Net debt increased by £81.2 million to £745.5 million, reflecting £106 million spent on acquisitions and growth capex – all of which are accretive within 12 months
- Full year proposed dividend of 11.33 pence, up 10% year-on-year (2014: 10.3 pence)
- Growth in statutory profit before tax of 87% and statutory profit after tax of 80% with no exceptional costs in 2015
- ROCE improved from 10.7%* to 11.7%
Our reputation for excellence is also generating new growth
- Two successful launches of significant new services in new markets during the year:
- German rail services, with the RME contract launched in December
- Bahrain bus contract launched in February 2015
- €1 billion Rhine Ruhr Express (RRX) contract won during 2015, taking secured German rail revenues to €2.6 billion with a further appeal on Nuremberg due to conclude shortly
- ALSA won the Imserso contract for pensioner travel and launched services in a fourth Moroccan city, Khouribga
- Bid for East Anglia rail franchise submitted during December 2015, with a result expected in July
- All divisions now have excellence accreditations and plans to match c2c’s five-star EFQM rating
- Our reputation for excellence is helping to drive further market expansion:
- We are currently working on a further three bids in German rail, worth €3 billion in total revenue
- We are developing a strong bid for the Manchester Metrolink tram system, with submission in early May
- We have been shortlisted for other bus contract opportunities in Europe and the Middle East
Dean Finch, National Express Group Chief Executive said:
“This strong set of results demonstrates that our focus on operational excellence is generating excellent returns for our shareholders and customers. With our German rail and Bahrain bus contracts, we have successfully launched services in two new markets during the year. I am pleased that every division has increased revenue, helping to drive overall group profit growth and another strong free cash flow performance. Our commitment to our customers and safety has also been recognised in a record year of industry awards.
“With this year’s strong cash performance and our confident outlook, and in-line with our previous commitment to now include rail profits in our dividend policy, we propose to raise the full year dividend by 10 per cent. We continue to draw on our international reputation for operational excellence to expand new market opportunities. We have an active pipeline of bids within Europe and the Middle East that will continue to deliver new growth opportunities.”
National Express Group PLC
|Matthew Ashley, Group Finance Director||0121 460 8655|
|Anthony Vigor, Director of Policy and External Affairs||07767 425822|
|Louise Richardson, Investor Relations Manager||07827 807766|
|Rebecca Mitchell||020 7379 5151|
There will be a presentation and webcast for investors and analysts at 0900 on 25 February 2016. Details are available from Rebecca Mitchell at Maitland.
National Express Group PLC (“National Express” or the “Group”), a leading international public transport group, operates bus, coach and rail services in the UK, Continental Europe, North Africa, North America and the Middle East.
Unless otherwise stated, all operating profit, operating 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: IFRS result found in the third column, excluding 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.
Underlying revenue compares the current year with prior year on a consistent basis, after adjusting for the impact of currency.
In UK Bus, commercial revenue is that from fare-paying customers and excludes concessions and contracted services. In UK Coach, core express revenue is that from the scheduled National Express network.
Constant currency basis compares the current year’s results with the prior year’s results translated at the current year’s exchange rate.
Operating margin is the ratio of normalised operating profit to revenue.
‘Return on capital employed’ (‘ROCE’) is normalised operating profit divided by tangible and intangible assets.
‘Return on assets’ (‘ROA’) is normalised operating profit divided by tangible assets.
Operating cash flow is the cash flow equivalent of normalised operating profit. Free cash flow is the cash flow equivalent of normalised profit after tax. A reconciliation is set out in the table within the Finance Director’s review.
EBITDA is “Earnings Before Interest, Tax, Depreciation and Amortisation.” It is calculated by taking normalised operating profit and adding depreciation, fixed asset grant amortisation, normalised profit on disposal of non-current assets and share-based payments.
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).
Gearing ratio is the ratio of net debt to EBITDA over the last twelve months, including any pre-acquisition EBITDA generated in that twelve month period by businesses acquired by the Group during the period.
The annual punctuality measure for c2c is the moving annual average (MAA) public performance measure (PPM) to 6 February 2016.
Safety Incidents measure those for which the Group is responsible and is based on the Fatalities and Weighted Injuries Index used in the UK Rail industry.
Earnings per share (EPS) is the profit for the year attributable to shareholders, divided by the weighted average number of shares in issue, excluding those held in the Employee Benefit Trust which are treated as cancelled.