Network Rail announces first profit

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The Independent Online

The firm in charge of Britain's railway tracks and signals said today that it had made a profit for the first time in its history.

Network Rail delivered a surplus of £747 million for the six months to September 30, compared with losses of £108 million a year earlier.

The not-for-dividend firm, which replaced Railtrack in 2002, will spend the cash on the rail network.

The results also showed train punctuality for the period averaging at 89.5 per cent - the highest level for seven years.

And around £1.1 billion has been taken out of the cost of operating and maintaining the railway infrastructure in the past two and a half years.

At the same time, a further 7 per cent increase in capital expenditure has seen almost £1.5 billion invested in the network over the last six months.

Network Rail chairman Ian McAllister described rail transport as "a success story", but warned that much work still needed to be done.

He added: "We must respond now to the challenge of accommodating the growth predicted in the years ahead. The need to boost capacity in the network is clear, and Network Rail will play its part in making this happen."

Revenues increased by £984 million on the previous six months, mainly as a result of higher track access charges and the end of a two-year agreement deferring the payment of a revenue grant from the Government.

In the first two years of its five-year control period, Network Rail was forced to fund investment by debt, causing higher interest payments.

Performance payments added £52 million to revenues and reflected continued strong train operating performance, Network Rail said.

The company's profits are not distributed to shareholders but are used to either reduce debt or re-invest in the railway.