National Express Group PLC Trading Update (6458E)
May 10 2017 - 2:00AM
UK Regulatory
TIDMNEX
RNS Number : 6458E
National Express Group PLC
10 May 2017
10 May 2017
National Express Group PLC
Trading Update
Strong momentum maintained
National Express Group PLC ("National Express" or "the Group")
today reports its Trading Update for the period 1 January 2017 to
30 April 2017 ("the period").
Overview
The Group has maintained its strong momentum from 2016, with an
overall revenue increase from continuing operations of 5.4% on a
constant currency basis, up 15.8% on a reported basis, benefiting
from organic growth and a number of bolt-on acquisitions made last
year, together with significant foreign exchange tailwinds. The
Group remains on target to deliver its profit expectation and free
cash flow and leverage targets for the year.
Highlights
Our strategy of consistently focusing on operational excellence,
the deployment of technology and pursuing growth through new
opportunities including bolt-on acquisitions continues to
deliver.
-- Group profit before tax is up year-on-year on a constant
currency basis, driven by both organic growth and the benefit of
recent acquisitions.
-- North America has had a strong start to the year with revenue
up 5.8% in constant currency, boosted by the recent acquisitions.
We have had another strong bid season with our consistently high
contract retention rate at 96%. 2017 has seen a much smaller
proportion of contracts up for renewal compared to last year. Where
contracts have been renegotiated or renewed we have secured an
average price increase of 3.8%, up 2.2% across the entire
portfolio.
-- ALSA has delivered a strong increase in revenue, up 8.4% in
constant currency, with organic growth also enhanced by
acquisitions. The division saw good passenger growth in the period,
with Spain's real-time active revenue management system performing
well and helping to drive a strong performance over the Easter
break.
-- In the period, one of our Spanish long distance coach
concessions was retendered. Although relatively small in revenue
terms, the Madrid-Guadalajara renewal has confirmed the importance
of the quality elements of bids, a key strength of our offer. It
has provided us with further confidence in our future prospects
through the concession renewal process.
-- UK Coach has also benefitted from our real-time revenue
management system and delivered an increase in patronage over the
Easter break of 4%. Revenue was up 2.7% during the period.
-- Overall, UK Bus commercial revenue has declined by 0.5% in
the period. The challenging conditions experienced at the end of
2016 continued in the early part of the year, passenger number
decreasing 0.7% in the period. Recently, however, we have seen a
more encouraging performance, with commercial revenue now flat year
on year and passenger numbers up 1% in the last six weeks.
-- UK Bus has seen positive results from the Sandwell and Dudley
fare reductions, with passenger growth already sufficient to yield
overall revenue growth in the local area. We will shortly extend
the lessons from these early successes further across the West
Midlands. A recent restructuring - including management changes to
bring UK Coach's revenue expertise in to UK Bus - is designed to
target additional revenue growth initiatives as well as cost
efficiencies. We look forward to working constructively with the
new West Midlands Mayor to deliver ever-improving services and
tackle congestion.
-- Our German Rail services continue to perform well, with
operational and customer service statistics remaining strong. We
recently clarified our revenue position in Germany including latest
passenger count data, allowing us to recognise all revenue earned,
confirming the profitability of the contract.
-- We continue to have a strong pipeline of further acquisition
opportunities and are actively pursuing targets in North America
and Europe. We are also assessing two German rail bids during the
year.
Dean Finch, Group Chief Executive, commented:
"I am pleased we have maintained our strong momentum into 2017,
with a good revenue performance driven by both organic growth and
the benefit of our recent acquisitions. Our diversified portfolio
is providing broad-based growth that is also providing additional
opportunities for further expansion.
"We will continue to focus on operational excellence to drive
our growth by both delivering high standard services for our
customers and generating cash and returns that we can invest in
future expansion. These opportunities will continue to be sought in
a disciplined manner and we will only pursue them if they meet our
strict financial criteria. We remain on track to meet our full year
profit and cash flow expectations."
Enquiries
National Express Group PLC
0121 460
Matthew Ashley, Group Finance Director 8655
Anthony Vigor, Director of Policy and
External Affairs 07767 425822
Louise Richardson, Head of Investor
Relations 07827 807766
020 7379
Maitland 5151
Rebecca Mitchell 07951 057351
There will be a conference call for investors and analysts at
0745 on 10 May 2017. Dial in details are as follows:
UK Toll Number: +44 33 3300 0804
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: 06782883#
Notes
Constant currency basis compares the current year's results with
the prior year's results translated at the current year's exchange
rates. The Board believes that this gives a better comparison of
the underlying performance of the Group.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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