Pay and profits rise at Virgin Rail despite cutbacks in services

Sir Richard Branson's much-criticised Virgin Rail business made a £38m profit last year after a big increase in subsidy payments from the Government.

The latest accounts for Virgin Rail Group Holdings, the parent company of West Coast Trains and CrossCountry Trains, also show that the pay of the chief executive, Chris Green, rose by 8.5 per cent to £230,000.

Virgin Rail made a pre-tax profit of £37.7m in the year to 3 March compared with a profit of £1.8m the previous year according to accounts filed at Companies House last week.

The disclosure of the increase in profits comes days after Mr Green warned that CrossCountry services would have to be cut because of insufficient capacity on the network.

The profit came after an increase in franchise subsidies of more than £100m to £306m for the year. At the same time, however, there was also a sharp increase in Virgin's track access costs from £209m to £371m.

Rolling stock costs also rose from £187m to £195m although this included the benefit of an £11.5m compensation payment from the Canadian train builder Bombardier for late delivery of Voyager trains for Virgin's CrossCountry services.

Staff costs rose from £104.8m to £122m and numbers increased by 439 to 3,869 after an initiative to recruit more train drivers. Despite Mr Green's increase in pay, overall remuneration of directors fell from just over £1m to £885,000.