TIDMNEX
RNS Number : 4304Y
National Express Group PLC
09 May 2019
National Express Group PLC: Trading Update
9 May 2019
Growth in every division
National Express Group PLC ("National Express" or "the Group")
today reports its Trading Update for the period 1 January 2019 to
30 April 2019 ("the period").
Revenue growth
in constant currency
ALSA +11.8%
----------------------
North America +8.3%
----------------------
UK +4.4%
----------------------
UK bus +1.8%
----------------------
UK coach +7.0%
----------------------
German Rail +5.2%
----------------------
Group +8.3%
----------------------
Overview
-- The Group has built on its record performance in 2018 and
delivered growth in every division.
-- Group revenue increased by 8.3% on a constant currency basis, up 11.3% on a reported basis.
-- Good growth in Group profit before tax year-on-year, on both
constant currency and reported bases.
-- The Group remains on target to deliver its revenue, profit,
free cash flow and leverage targets for the year.
Highlights
ALSA has had a particularly strong start to the year, with
revenue increasing by 11.8% in constant currency. On a
like-for-like basis, revenue grew 7.8%. All Spanish segments,
Morocco and Switzerland grew strongly, continuing the positive
trend of broad-based growth across ALSA. Trading over the important
Easter period was positive, with revenue up 9.1% and passengers
increasing by 5.5%, year-on-year.
We are delighted to have renewed our largest Spanish urban bus
franchise, a 10 year contract in Bilbao. The long haul concession
renewal process has still not resumed and we do not expect any
material impact on earnings before 2021. We are well-advanced in
our preparations for our new services in Rabat, which start later
this year.
North America has increased revenue by 8.3% in constant
currency, despite the impact of school closures after particularly
severe snow. The incremental year-on-year profit impact from the
associated school closures is currently around $4.5 million,
although we expect a sizeable proportion of the lost schools days
to be made up within our first half of the year. On a like-for-like
basis, revenue grew 3.2%.
We have again applied a disciplined approach to pricing in the
school bus bid season, prioritising margins and managing driver
wage inflation. With 40% of our school bus revenue up for renewal,
we are pleased to have so far secured an average rate increase of
5%, or 3.4% across our whole portfolio. These increases are fully
offsetting driver wage inflation.
With our focus on margins and on-going 'up-or-out' strategy we
have lost net 1,000 buses during the season so far, but expect that
this figure will reduce as bidding closes and new routes are picked
up when schools start.
In the period, and as previously announced, we acquired a
majority stake in WeDriveU, Silicon Valley's premier employee
shuttle business. This is a fast-growing business in a fast-growing
region that also transforms our credentials in a very attractive
nationwide market. We also made a further small acquisition in the
period: a transit and para-transit operator in Arizona that also
provides our first entry in to the growing non-emergency medical
transportation services market.
Our UK operations have built further on their good performance
in 2018, with revenue up 4.4%. Our UK coach business revenue has
grown by 7.0% in the period. Our core coach business has delivered
revenue growth of 5.3% in the period; this performance includes a
particularly strong Easter, with revenue up 7.1% and passenger
growth of 3.1%, year-on-year. We were delighted to retain our
contract for both airside and car park shuttle services at Stansted
Airport, for another five years at least. A trial of an on-demand
coach service focusing on large events ('NEON') has also been
launched.
Our UK bus business continues to see the benefit from the rapid
adoption of smart, mobile and contactless ticketing. In the period,
total bus revenue was up 1.8%, driven by an increase in commercial
patronage of 1.6% and growth in tendered contracts. Commercial
revenue per mile again grew strongly at 4%. We continue to work
closely with the relevant local authorities to prepare for the
start of Birmingham's Clean Air Zone (CAZ) on 1 January 2020. Our
bus fleet will be fully-compliant ahead of the CAZ's introduction
and we are well-advanced in developing options to support the
policy's ambition to secure significant modal shift.
Our German rail services continue to perform well, with
underlying revenue growth of 5.2%. The mobilisation for our next
contract - the first of three on the Rhine-Ruhr Express routes - is
firmly on-track ahead of its start in June 2019.
We continue to have a strong pipeline of further acquisition and
bidding opportunities across all divisions.
When Matthew Ashley's two-year assignment as President and CEO
of our North American business concludes on 31 August he will
assume a new role of Group Business Development Director, working
on a number of projects including a particular focus on
acquisitions. With the significant recent growth in our Transit
business, Judith Crawford (Chief Executive of Transit) and Gary
Waits (Chief Executive of School Bus) will both join the Group
Executive Committee.
Following the close of the Annual General Meeting, Dr Ashley
Steel will assume the role of chair of the Remuneration Committee.
Jane Kingston, the current chair of the Remuneration Committee,
will remain on the Board and as a member of the Remuneration
Committee.
Dean Finch, Group Chief Executive, commented:
"I am pleased all of our divisions have started 2019 in a
positive manner and we have seen strong trading over the important
Easter period. Organic revenue growth has been secured across all
of our increasingly diversified international portfolio. As our
acquisition of a majority stake in WeDriveU demonstrates, this
diversified international portfolio also continues to present new
opportunities for further expansion, which we pursue when they meet
our strict financial criteria.
"We will continue to focus on operational excellence to drive
shareholder value, by both delivering high quality services for our
customers and generating cash to invest in technological
modernisation and future expansion. We remain on track to meet our
full year profit and cash flow expectations."
Enquiries
National Express Group PLC
Chris Davies, Group Finance Director 0121 460 8655
Anthony Vigor, Director of Policy and External
Affairs 07767 425822
Louise Richardson, Head of Investor Relations 07827 807766
Maitland/AMO 020 7379 5151
James McFarlane 07584 142 665
There will be a call for analysts at 8:00am, hosted by Dean
Finch, CEO, and Chris Davies, Group Finance Director. The
dial-in-details for the call are:
UK Toll Number: +44 3333 000 804
UK Toll-Free Number: 0800 358 9473
URL for international dial in numbers:
http://events.arkadin.com/ev/docs/NE_W2_TF_Events_International_Access_List.pdf
Participant PIN: 28168044#
Notes
Legal Entity Identifier: 213800A8IQEMY8PA5X34
Classification (referencing DGTR Annex 1R): 3.1
The disclosure in this announcement regarding Matthew Ashley's
change of role is made pursuant to Listing Rule 9.6.11R (3).
For definitions see page 205 of the 2018 Annual Report and
Accounts.
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END
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