National Express on track as revenues rise
Tuesday 20 December 2011
The boss of National Express today said the transport group had finished the year in "excellent shape" as it reported sales growth across all its divisions.
The group expects to report revenues growth at its rail, coach and bus divisions in 2011 as higher petrol prices forced people from their cars onto public transport.
National Express said it was in line to meet full-year profit expectations as rail revenues are expected to have grown 6% this year, bus revenues are forecast to be 4% higher and coach revenues ahead 5%.
The update came as the Association of Train Operating Companies (Atoc) revealed prices would increase at an average of 5.9% this January, following an average 6.2% increase at the start of this year.
Elsewhere, National Express's coach and bus divisions came under pressure from a Competition Commission report, which called for reforms to make it easier for new entrants to gain a foothold and prevent existing operators from undermining rivals.
Dave Finch, National Express chief executive, said: "National Express is finishing 2011 in excellent shape."
National Express said profit margins in its bus division, which operates in the West Midlands and Dundee, have climbed back to above average levels for the industry, while passenger numbers returned to growth in the West Midlands. The group also added 250 new buses to its new fleet.
The coach division has seen revenues driven by an increase in airport, long-haul and London services, National Express added.
But shares in National Express wavered after the Competition Commission published its report into the bus market.
The Commission found that in many areas bus operators face little or no competition, leading to passengers facing less frequent services and in some cases higher fares than where there is some form of rivalry.
The Commission outlined a number of reforms, including ensuring new entrants and competing operators can access bus stations managed by other operators on fair terms.
National Express, which runs the c2c and East Anglia rail services between London and Essex, will increase fares this January.
Regulated fares, which include season tickets, had been due to rise by an average of 8% in January - 3% above July's RPI inflation figure - but Chancellor George Osborne lowered this to July's RPI plus 1%.
Train operators increased fares by an average of 6.2% in January this year but National Express said passenger volume growth remained strong as the cost of filling up a car increases.
National Express, which also operates in Morocco, Spain and the US, is forecast to report a 12% rise in pre-tax profits to £180.5 million in the year to December 31 on revenues up 3% to £2.2 billion. It publishes its results in March.
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