National Express takes on US school buses
Friday 19 March 1999
The group said it was in astrong position and could spend up to pounds 250m "tomorrow" because of its low gearing. It said up to 40 per cent of sales could come from overseas within two years.
Colin Child, the National Express deputy chief executive, said the US school bus network - the country's largest transport system - was ripe for consolidation and privatisation. He said two-thirds of the system was still run by public sector school boards.
"The other third in the private sector is fragmented and run by 5,000 `mom and pop' organisations," he said.
Last September National Express bought two operators with 1,750 buses, making it the US's fifth largest operator. Mr Child said National Express had been attracted to the US, and to Australia where it is bidding for rail franchises, because of the common language and similar legal and accountancy standards.
Within two years, up to 40 per cent of turnover would come from overseas, including 30 per cent from the US from the current zero position.
The expansion plans were revealed as the group, with interests in trains, airports, buses and coaches, announced a 77 per cent surge in annual profits for 1998 to pounds 97m from pounds 54.8m.
Operating profits before exceptional costs rose 14.4 per cent to pounds 95.6m (pounds 83.6m). The total dividend was 16p per share, up from 13.5p.
Much of the progress was attributed to the inclusion of a full year performance for three train operating companies acquired in 1997 - Central Trains, ScotRail and Silverlink.
Together with the Gatwick Express and Midland Main Line, the division saw turnover steam ahead to pounds 918m and profits rise 31.5 per cent to pounds 25.9m.
Passenger growth ranged from 5 to 15 per cent on different routes, with passenger numbers up 7.5 per cent to 137 million.
Mr White said National Express planned to ask the Government to extend its franchise terms for Central, ScotRail and Silverlink beyond their current seven years.
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