£1.52bn pre-tax profit for Network Rail

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The Independent Online

Rail infrastructure company Network Rail (NR) made a pre-tax profit of £1.52bn last year but its net debt rose to more than £22bn, it was announced today.

The pre-tax profit for 2008/09 was roughly comparable with the £1.59bn figure achieved in 2007/08.



But the not-for-dividend company said its net debt had risen from £19.7bn to £22.3bn.



And its profit after tax dipped from £1.2bn in 2007/08 to £609m in 2008/09, mainly due to a £524m increase in the deferred tax charge following the abolition of the industrial buildings allowance.



Also, although it introduced economy measures during last year, NR's 27 per cent efficiency savings for the period since 2003/04 was short of the Office of Rail Regulation (ORR) target of 31 per cent.



Generally, though, the company was able to point to a successful year in performance terms, with train punctuality hitting the 90 per cent mark over the period April 2008 to March 2009.



It is against NR's performance that the company's remuneration committee decides on annual bonuses for the staff, with top directors also eligible for an additional bonus as part of a rolling three-year incentive scheme.



Details of this year's bonuses are due to be released at the end of this month.



NR chief executive Iain Coucher has already said he will forego any annual bonus this year. But he is still eligible for the incentive scheme bonus.



Last year Mr Coucher got an annual bonus of more than £305,000 and a further £205,000 bonus under the incentive scheme. This was despite the company being fined a record £14m by the ORR for three serious engineering work overruns over the Christmas and new year 2007/08 period.



Today, NR said it had:



* Invested a record £4.7 billion in the railway - up from £4 billion.



* Introduced 4% efficiency gains in 2008/09.



* Cut delays attributable to the company from 9.5 million minutes to 8.9 million minutes - the lowest level for more than a decade and beating the ORR target.



* Completed the £9 billion West Coast Main Line upgrade project on time.



Mr Coucher said: "Network Rail has delivered a good set of results, meeting or exceeding almost all its targets and those set by the ORR.



"Train performance is at an all-time high, the railways have never been safer to travel on, millions of pounds are being saved from the cost of running the network and billions invested to make further improvements. Our strong focus on innovation and investment to improve our operations and reduce operating costs is driving our performance."



Mr Coucher concluded: "We have had a good year overall and there is always room for improvement. I am acutely aware that customers expect and deserve an ever-improving rail service.



"Over the next five years our service will improve again as we embark upon an ambitious £35 billion programme of work to deliver even higher levels of performance, reduce overcrowding and expand and grow the rail network. My vision is for a high-performing railway, easy and affordable to access and comparable with the very best railways in the world."

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