National Express chief steps down amid solid rise in profits

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Phil White, the long-serving chief executive of the bus and rail operator National Express, is to step down this year after running the company for almost a decade.

The surprise announcement came as the company reported a strong rise in profits, despite the buffeting of higher fuel costs, and disclosed that it has pulled out of the bidding for the South West Trains franchise, the biggest commuter railway in the country.

Mr White, who has led National Express's expansion into the US and, more recently, Europe through last year's acquisition of the Spanish coach operator Alsa, said the decision to retire was his own.

The chief executive since January 1997, and still only 56, Mr White said he had tired of living in a London hotel and commuting home to his house near Harrogate at weekends. "Ten years is a long time. I have had enough of results roadshows and corporate box-ticking. I talked things over at Christmas with my missus, Carol, and came to the conclusion it was the right time for a change. I am sorry to go but happy at the same time."

He said he had no intention of taking another executive job with a listed company but hoped to take on some non-executive roles and perhaps get involved with one or two smaller companies in Yorkshire. A search for his successor is under way. The front-runners internally are Ray O'Toole, the chief operating officer, and Adam Walker, the finance director.

Mr White said National Express had decided to concentrate on rail franchises where it is the incumbent operator rather than bid for new franchises. Its Central Trains, Silverlink and Midland Mainline franchises are due to be put out to tender next year.

Underlying pre-tax profits for last year rose 11 per cent to £135.3m. Operating profits from the group's rail division, which includes c2c, one (formerly Great Eastern) and Gatwick Express, climbed 5 per cent to £64.2m, despite a decline in revenues caused by the loss of the ScotRail franchise and the impact of July's London bombings which hit off-peak travel badly.

The group's UK bus and coach businesses held up profits with the benefit of hedging to protect against rising fuel costs the fuel bill this year will be £7m higher. The bus division, which operates 2,250 vehicles has also been helped by the recruitment of 400 Polish drivers.

Mr White has agreed to step down by the end of the year at the latest but hopes his successor is in place by the summer. He said his main task in the remaining months would be to oversee the integration into National Express of Alsa - a deal he spent six years putting together with the Cosmen family who owned the Spanish business.

National Express is also a 21 per cent shareholder in London & Continental Railways, the owner of the Channel Tunnel Rail Link, which has had a bid approach from a consortium led by the former government transport adviser Sir Adrian Montague.

Mr White said he was keen to wrap National Express's stake in Eurostar into any deal with a new owner to rid itself of the £9m loss it is incurring on it shareholding.