Network Rail profits pass £2bn mark

Network Rail said it had continued to make "steady progress" in reducing its costs when it announced increased profits today, adding that it was on target to achieve "challenging" efficiency savings.

The infrastructure firm published its full year results for 2010/11, saying it had cut the costs of running the railway by £400 million in the past year and by £600 million since 2009.

Revenue increased from £5,668 million to £5,712 million while operating profits rose from £1,981 million to £2,028 million, giving a profit after tax of £313 million, up from £284 million the previous year.

Capital expenditure was £3,997 million compared with £3,920 million in 2009/10.

Group finance director Patrick Butcher said the findings of the recent Government-commissioned McNulty review showed there were clear opportunities for the industry to make further savings in the costs of running the railway.

"The message is clear - the rail industry simply has to become more affordable for the users of the railway network and for taxpayers.

"This is a moment of great potential for the rail industry, where real reform for the benefit of user and taxpayer is a genuine possibility. Network Rail has been in the vanguard of change over the past year and will continue to drive for rapid, safe evolution.

"Examples of our initiatives include moving decision making closer to our customers, partnering with key industry players and setting up the potential for greater competition as a stimulus to further improvements in performance. There can be no turning back for reform - the key question we face is how to deliver at an ever increasing pace," he said.

NR reported that its operating costs, excluding depreciation, fell to £2,467 million from £2,546 million, while staff costs fell to £1,734 million from £1,746 million.

Staff numbers were cut to 35,606 from 37,153 with average salaries increasing by 1.5%.

Operating and maintenance costs per train mile in real terms have fallen by 77p to £7.61 during the last year - down from £11.64 seven years ago, said NR

NR's maintenance division was restructured, saving more than £100 million a year, the company reported.

Performance dropped over the year, with 90.9% of passenger trains running on time, down on the 2009/10 figure of 91.5%, with NR mainly blaming the severe winter weather.