The Investment Column: National Express

PLAIN-SPEAKING Phil White, chief executive of National Express, was talking up the company's prospects again yesterday as the passenger transport operator came in with a 12 per cent rise in interim pre-tax profits to pounds 40m.

The bulk of the half-year gains came from organic growth. Passenger numbers on its five UK rail franchises rose 7 per cent; its UK bus passenger volumes grew a more modest 1 per cent. The coach division served 3.5 per cent more passengers. Like other transport groups, National Express has recently been expanding overseas, with further moves into the US and Australian markets and promising interests in school bus operations. The group is hinting it is set to bag the 99-year lease to operate New York state's Stewart Airport.

Recent acquisitions should feed through into the second half, and further organic passenger volume growth seems likely. Meanwhile, a squeeze on costs continues. One possible cloud on the horizon is a $75m plus suit from US firm Atlantic Express Transportation. No provision has been made; Mr White says his defence is sound.

Analysts upgraded full-year profit forecasts yesterday to about pounds 111m. At 952p, the shares are well off their recent high of 1245p. But with further upgrades possible, they are a buy.