TIDMNEX
RNS Number : 9991P
National Express Group PLC
16 October 2019
Major EUR1bn bus contract caps summer of success
Casablanca win follows renewal and near-doubling of second
largest US transit contract
-- Already the largest bus operator in Morocco, this up to
15-year contract nearly doubles National Express' presence.
-- Starting next month, this contract in Morocco's largest city
means National Express is now the sole operator in 5 of the
country's 6 biggest urban areas.
-- National Express will operate more buses in Morocco than the UK from next year.
-- Follows a successful summer, including the renewal and
significant expansion of our second largest US transit contract,
with anticipated revenue nearly doubling to $420 million over 7.5
years.
National Express Group PLC ('National Express') is pleased to
announce that its Spanish and Moroccan division, ALSA, has been
awarded a major bus contract in Casablanca, for up to 15 years.
Casablanca is Morocco's largest city and economic capital. The
contract is expected to secure more than EUR1 billion in revenue
over its term.
The contract will start in November 2019 with an initial 400
buses in operation. This will increase to 700 buses next year,
carrying 100 million passengers annually. As well as operating the
bus services, the contract includes responsibilities to introduce
new payment and scheduling systems, alongside a network
re-design.
This contract has been awarded to ALSA because of their
reputation for excellence within Morocco, recently reinforced with
the successful start-up of the over 400 bus Rabat contract in
August. As in other Moroccan cities, there is opportunity for
further growth in other local Casablanca transport markets, such as
school buses and tourist services.
This caps a successful summer for National Express, including
the renewal and significant expansion of our second largest US
transit contract, in Boston. This renewal, for up to 7.5 years,
starting in January 2020, has seen revenue nearly double to $420
million across the contract. Small contract wins in New York (two)
and Connecticut continue to develop our hub strategy, with
efficient growth from existing locations in major urban areas.
Additionally, the excellent start-up of our new 400 vehicle
accessible transport business in the West Midlands over the summer
has helped us build a strong credential to target expansion in this
interesting and growing market.
Dean Finch said:
"I am delighted we have secured this significant contract in
Morocco. This nearly doubles our presence in Morocco, which had
already doubled in August with Rabat's successful start-up. We will
now operate more buses in Morocco than the UK. We look forward to
serving the people of Casablanca soon.
"It is particularly pleasing that our track record for service
excellence in Morocco was an important reason for our success. A
similar reputation was also crucial to last week's successful
renewal and significant expansion of our second largest US transit
contract, in Boston. It is through this consistent focus on
excellence for our customers that we will continue to deliver
growing shareholder returns."
Notes to Editors
The Casablanca contract is for an initial 10-year term, with an
optional 5 years depending on well-established performance
criteria. Applying the same performance criteria, ALSA secured a
5-year extension on its Marrakesh contract in 2014.
Due to its start late in the year, as well as start-up costs, we
expect the Casablanca contract to make only a small contribution to
this year's and next year's earnings. After that, we expect the
contract to build to around typical ALSA margins.
National Express in Morocco: long-term success
ALSA has been present in Morocco for 20 years, building from an
initial contract in Marrakesh to operate services in Agadir (2010),
Tangier (2013), Khouribga (2015) and Rabat (2019).
Morocco has political and legal stability, combined with a
currency pegged to a basket of the Euro and Dollar, encouraging
long-term investment. With other large cities looking to tender
their urban bus services in the coming years, as well as potential
opportunities in the inter-city market, National Express believes
there are good prospects for further growth in Morocco in the
coming years.
As this table demonstrates, this win delivers our expectation of
further growth in the country as noted in our half year
results.
ALSA/National Express' Rapid Growth in Morocco
1999 2020 2021
BUSES 50 1,044 1,744
------------- -------------- ---------------
PASSENGERS 3.8 million 263 million 405 million
------------- -------------- ---------------
TURNOVER EUR1 million EUR97 million EUR157 million
------------- -------------- ---------------
* Annualised figures
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
James McFarlane 020 7379 5151
Legal Entity Identifier: 213800A8IQEMY8PA5X34
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END
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