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National Express (NEX)

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Tuesday 14 March, 2000

National Express

Final Results - Year Ended 31 December 1999

National Express Group PLC
14 March 2000

                          National Express Group PLC
                              Preliminary Results
                      for the year ended 31 December 1999

Financial Highlights

- Turnover up 11.7% to £1,476.7m (1998: £1,322.4m)
- Operating profit before exceptional costs and amortisation of goodwill up
  18.2% to £113.2m (1998: £95.8m)
- Interest cover 16.4 times
- Normalised profit before tax up 9.9% to £107.4m (1998: £97.7m)
- Normalised diluted earnings per share up 13.3% to 62.1p (1998: 54.8p)
- Final dividend of 12.45p (1998: 11.3p), making a total dividend for the year
  of 18.2p per share (1998: 16.0p), an increase of 13.8%
- Operating cashflow from continuing operations of £100.0m (1998: £98.2m)
- Significant investment programme
     - £295.1m on acquiring new businesses in new markets
     - £97.9m capital investment for growth in existing businesses
- Net debt at 31 December 1999 was £315.9m (1998: net cash of £35.1m)
- At 31 December 1999, the Group had net assets of £267.0m (1998: £211.9m)

Operational Highlights

- International growth strategy implemented - 25% of operations now in
  international markets:
     - Leading positions in US bus market
     - Australia's largest privately-owned public transport company
- Investment in new technology:
     - 10% shareholding in PCL will lead to introduction of travel smartcards
     - Investment in further enhancement of web site to enable customers to
       buy rail tickets online
- Record passenger numbers - up over 26% on 1998 levels. Over 660m passenger
  journeys were made on the Group's services during 1999
- One per cent growth in bus passenger numbers for second consecutive year.
  Strong passenger growth on four existing Quality Partnership schemes in West
  Midlands with another three being implemented in 2000. Three year £30
  million Infrastructure Investment Partnership being implemented
- 277 new low floor easy access buses put into service - representing £31m-
  investment. 40% of bus fleet is now easy access and average age of buses is
  less than 9 years
- Of 122 new trains on order worth £320m, 47 are already in service, with a
  further 75 due in 2000. 46 of these trains are in excess of franchise
  commitments. Frequency of rail services increased during 1999
- Operating profits for trains division up 8.1% to £28.0m, despite £30.9m
  decrease in subsidy. 10% increase in passenger rail revenues across trains
  division for second successive year
- Strengthened senior management team with new appointments to the Board.

Commenting on current trading and prospects, Chairman Michael Davies said:

'1999  was  a  successful year and the new year has started in line  with  our
expectations. Passenger numbers are continuing to increase. We  can  see  many
opportunities  for  further profitable growth in all  our  markets,  including
increasing transport privatisation worldwide.

The  SSRA  outlined its objectives for the franchise replacement programme  at
the  end  of  1999 and announced on 8 March this year that our Central  Trains
franchise has been selected for renewal. We welcome this announcement and  are
confident  that National Express can make a major contribution to meeting  the
SSRA's objectives. Provided we can be satisfied that a long term commitment to
passenger rail services can deliver good returns for our shareholders, we look
forward  to working with the SSRA to make its vision for a railway system  for
the 21st century become reality.

We  have the quality of management across the Group and the financial headroom
to take full advantage of all these opportunities and look forward to the year
ahead with confidence.'

For further information, please contact:

Phil White, Chief Executive
William Rollason, Finance Director
Helen McCorry, Group Communications Manager
National Express Group PLC                   020 7529 2000

Nicola Marsden/Steve Jacobs
Financial Dynamics                           020 7831 3113

There will be an analyst meeting at 0900 hours on 14th March 2000 at Financial
Dynamics, Holborn Gate, 26 Southampton Buildings, London WC2
                          National Express Group PLC
                              Preliminary Results
                      For the year ended 31 December 1999

In  1999  National Express became an international passenger transport company
with  25% of our operations now in international markets. Our operating profit
before  exceptional  items was ahead of last year and our  strong  cash  flows
funded  investment  in  both new markets and in our existing  businesses.  660
million passengers used our services - up over 26% on 1998 levels.

We expanded into key geographic markets. In the US we became the third-largest
school bus operator when we acquired Durham Transportation in August 1999  and
the  second-largest  public transit company when we added  ATC  Group  to  our
portfolio in December. In Australia, we became the largest private operator of
public  transport  services. We purchased National Bus Company  and  Transport
Management  Group in May, which together operate bus services  in  Australia's
four  major  cities.  In September, we took over three franchises  to  operate
train and tram services in Melbourne.

In  the  UK,  we  further developed the quality and value  for  money  of  our
services  for  passengers and all of our UK divisions increased  profits.  Our
business  philosophy  centres  on  encouraging  more  people  to  use   public
transport.  To  that end, we are working closely with all of our public-sector
partners to implement the Government's integrated transport policy.


During  the  year we greatly strengthened our senior management team.  Richard
Brown, previously head of our UK trains division, joined the Board in July  as
Commercial  Director. In November, Ray O'Toole joined from FirstGroup  plc  to
become Chief Operating Officer of our UK businesses and in the following month
William Rollason, who was previously at Carlton Communications Plc, joined  us
as  Finance  Director.  In  November we appointed Barry  Gibson,  Group  Chief
Executive of Littlewoods, as a non-executive Director. I welcome all  the  new
Board  members  whose fresh ideas, energy and enthusiasm will help  shape  our
ability to meet our objectives for long term, sustainable growth.

Financial Results and Dividend

Turnover  increased  by  11.7%  to to £1,476.7m (1998:  £1,322.4m).  Operating
profit,  before exceptional costs and the amortisation of goodwill,  increased
to  £113.2m  (1998:  £95.8m),  up  18.2%.  Profit  before  tax,  goodwill  and
exceptional  costs was up 9.9% to £107.4m (1998: £97.7m). Diluted,  normalised
earnings per share increased by 13.3% to 62.1p (1998: 54.8p).

We  generated  cash of £100.0m (1998: £98.2m) from continuing  operations  and
invested £97.9m in new assets and £295.1m in acquiring new businesses.

A  final dividend of 12.45p per ordinary share (1998: 11.3p) will be paid on 5
May  2000  to  shareholders on the register at 31 March  2000.  Including  the
interim  dividend, the proposed total dividend for the year  is  up  13.8%  at
18.2p per share.

Review of Operations

1999  was  a  successful  year. We invested in new markets,  in  our  existing
businesses and in new technology. This has helped us become a leading supplier
of high-quality, value for money passenger transport services worldwide.

Investing in new markets - United States and Australia

In the important US public transport market the acquisitions of Durham and ATC
gave  us  nationwide  coverage and critical mass in key sectors.  Our  new  US
division,  National  Express  Corporation, is the second-largest  provider  of
public  transit  bus  services  and the third-largest  student  transportation
company.  With a combined fleet of 8,000 vehicles, these operations serve  210
million  passengers a year and employ over 12,500 people, including more  than
10,000  drivers.  Turnover  in 1999 for the new  US  division,  following  the
acquisition of Durham in August, was £64.6m and operating profit was £9.5m.

There  are excellent opportunities for further growth in our US markets  where
only  30%  of  the student transportation sector and 8% of the public  transit
sector  is privatised. Our new businesses have impressive records for  winning
contracts and extending existing ones as well as encouraging their customers -
the  school  districts  and  local  municipalities  -  to  contract-out  their
services.  The combination of added-value service provision and  attention  to
working  in partnership with customers has enabled our companies to outperform
the  underlying  growth rates in their sectors. We are confident  that  during
this  year  we  will  increase our market share by winning new  contracts  and
making further strategic acquisitions.

In Australia, we are now the largest privately-owned public transport company.

During  the  year  we  strengthened the management of our bus  operations  and
established  a  clear  plan  for  achieving  greater  efficiencies.  New   bus
timetables  were launched in Melbourne in February 2000, and  we  are  working
with  other  local operators to replace the current ticketing systems  with  a
smartcard system by the end of 2001. We extended  our networks in Perth and in
Sydney,  where we worked closely with our public sector partners to develop  a
highly successful commuter bus priority route. Turnover for our Australian bus
companies  for the eight months following acquisition was £32.7m and operating
profit was £1.1m.

When  Victoria's public transport system was privatised last year we won three
long-term  franchises  to  operate trains and trams  in  Melbourne.  Over  148
million  passenger journeys were made on these services in 1999. Turnover  for
our  Australian  train  and  tram businesses for  the  four  months  following
acquisition was £59.1m and operating profit was £3.1m.

We have already improved performance since we took over these companies at the
beginning  of  September. We launched new products to encourage more  off-peak
travel and introduced more morning peak services.

We  are building on this excellent beginning: 150 new trains and trams,  worth
£310m, are being ordered to be delivered by 2004 onwards and refurbishment  of
the  existing  fleet  has  already  commenced.  We  are  committed  to  making
Victoria's  public  transport  system more efficient  and  to  encourage  more
passengers onto our services.

Investing in existing businesses


Turnover  for  our UK bus division was up 3.3% to £196.4m (1998: £190.1m)  and
operating  profit  was  up  8.7%  to £47.6m (1998:  £43.8m).  For  the  second
successive  year  one  per  cent more passengers used  Travel  West  Midlands'
(TWM's) services in 1999.

In  November, the UK Government held a national Bus Summit where a  number  of
commitments were made by the industry. We are already meeting many  of  these,
including  investment  in  new buses and people, partnership  initiatives  and
integration.  During  the year we invested £31m in 277  new  low-floor,  easy-
access  buses including the first high-capacity 'Bendi-Buses' and easy  access
double  deckers. Since embarking on our fleet replacement programme  after  we
acquired  TWM  four  years ago, we have invested over £80m  in  over  800  new
vehicles. The average age of our buses is now less than nine years and 40%  of
our  fleet  comprises low floor easy-access buses. The vast  majority  are  in
service  on  our  TWM network - making this the largest fleet  of  easy-access
vehicles  to be operating on a single bus network in Europe. All of these  new
buses run on low emission fuel, which reduces their impact on the environment.

More  frequent and new services were introduced across TWM's network  and  new
fare  offers and promotions were introduced during the year. Travelcard  sales
increased  by over 6% when we cut the cost of commuting by bus in  and  around
Birmingham to under £10 a week.

We  continued to strengthen our partnership programmes with local authorities.
Strong  growth on all four of our existing quality partnerships  in  the  West
Midlands  proves that more people will use buses if journey times are improved
and  quality standards raised. A further three quality partnerships are  being
implemented  in 2000. Construction work has also been completed at  the  first
congestion  'hot  spot'  in  the  West Midlands  as  part  of  our  innovative
'Infrastructure Investment Partnership' under which we have agreed  to  invest
£30m over three years. Further projects will be completed during 2000 and will
help  to alleviate the impact of congestion and improve the efficiency of  bus
services  across  the West Midlands - two of the most important  criteria  for
encouraging more people to travel by bus.

At  the  end  of  May 1999, the £145m Midland Metro light-rail  system,  which
operates  between  Wolverhampton and Birmingham, was launched.  Three  million
passenger  journeys  were made on this service in the first  six  months.  The
Midland Metro not only represents a completely new public transport system  in
its own right but, thanks to the work that has been done to integrate it fully
with  the existing bus and heavy-rail systems across the region, it also means
that  the West Midlands can now rightfully claim to have one of Britain's most
accessible public transport networks.


Total  turnover  for  our trains division was up to £921.8m  (1998:  £918.0m).
However,  excluding  franchise payments, which  reduced  in  1999  by  £30.9m,
turnover  was  up  8.3%  to £453.6m and passenger revenue  increased  by  10%.
Operating profit increased by 8.1% to £28.0m (1998: £25.9m).

The  first  47  new trains from our £320 million order of 122  were  put  into
service.  Of  the  122,  46  of these trains are in excess  of  our  franchise
commitments.  It  is  disappointing that in some cases the manufacturers  have
failed  to  deliver  all of our new trains on time as  this  has  delayed  our
ability  to  implement  fully  plans for developing  passenger  services.  The
remaining 75 new trains are due to come into service during 2000. Those trains
that  are  now  in  service  have delivered tangible  customer  benefits.  The
frequency of many services has doubled and new destinations are being  served.
This  has  given  greater  flexibility and choice of  travel  options  to  our

In  February  2000  we launched 'Airport Express' with BAA. 'Airport  Express'
will  improve  public transport links to airports and the two  companies  will
jointly  market the Gatwick and Heathrow Express rail links to develop  common
standards  of  service quality. We aim to develop this initiative  further  by
integrating  our  extensive  airport coach  networks  with  these  businesses.
Together  with BAA we put forward a proposal to the SSRA, under its  franchise
replacement  programme, to operate Stansted Express as part of  an  integrated
set of London Airport Express services.

We developed our sales distribution channels during the year and sales through
our train  call centres increased by 50% in 1999. We are building on this, and
our  success at selling our coach services on the internet, by investing in  a
new  web  site which, when launched later this year, will enable customers  to
buy rail tickets online.

Good  punctuality and reliability performances continued to be achieved across
the  division.  In  particular,  Silverlink made  major  improvements  to  its

The  SSRA announced on 8 March 2000 that Central Trains was to be included  in
the  second  tranche of its franchise replacement programme. We  have  already
submitted  a proposal to the SSRA for improving Central's services across  its
network  and look forward to developing these ideas further over the next  few
weeks. We also submitted proposals to the SSRA for the Silverlink County  line
and London orbital routes.

The  safety of our rail services is our priority and is an important  part  of
our  culture.  National Express was instrumental in helping to  establish  the
National  Safety Task Force in November to improve safety across  the  railway
network.  One  of  its  first actions was to launch  a  national  confidential
telephone hotline for staff concerned about safety. This system was modeled on
a ScotRail innovation which has a proven record of success.


Turnover  for  ongoing businesses within our coach division  was  up  2.7%  to
£168.2m  (1998:  £163.8m)  and operating profit  increased  to  £11.0m  (1998:
£10.3m). Passenger journeys increased by 5% year-on-year.

We made coach travel easier by introducing more turn-up-and-ride 'Shuttles' on
our  core  National Express network. These Shuttles help meet  the  increasing
demand for routes which directly link to major towns and cities.

We  developed our sales and distribution channels and sales through  our  call
centres and internet site - which now account for 17% of sales - grew by  16%.
More locations were fitted with our 'Smart' system, which enables
ticketing-on-departure. Customers can now book via our call centres or web
site and collect their  tickets at the point of departure, making it easier to
buy tickets  and reducing the time between ticket purchase and time of travel.

At  the  start of the year we further developed our range of dedicated branded
airport  coach services by launching Airlinks. We acquired the net  assets  of
Silverwing,  which  provides  crew and passenger  transfers  at  Heathrow  and
Gatwick  Airports and, together with our existing businesses, we are now  able
to  provide  the  most complete range of air and landside passenger  and  crew
transportation  services  to airlines in the UK. We acquired  Cambridge  Coach
Services  to expand our express coach links from East Anglia to London's  four
airports  and  to enable us to capitalise on the substantial growth  which  is
anticipated at Stansted Airport.

Eurolines  launched promotional fares to build on its policy of providing  the
best  value-for-money  in  the  cross-channel travel  market,  against  strong
competition  from no-frills airlines. Passenger numbers on its key  London  to
Paris and London to Amsterdam routes grew strongly.


Turnover  was up 3.7% to £33.9m (1998: £32.7m) and operating profit  increased
by  3.2% to £12.9m (1998: £12.5m), despite the loss of duty free sales for the
last  six months of the year, which affected operating profit by approximately

1999  was  another record year for East Midlands Airport (EMA), with passenger
numbers up 4% and cargo tonnage up 15%.

We  continued  to  improve  EMA's facilities. Work began  on  the  joint  £70m
investment  in  a  new air cargo centre with DHL. This  is  due  to  be  fully
operational  in April 2000 when it will be able to handle 20,000  letters  and
25,000  parcels  each  hour.  Work  also  began  on  extending  EMA's  runway.
Completion is expected later this year and will enable the airport  to  handle
passenger and cargo aircraft to long-haul destinations.

The  first  phase of the Pegasus business park at EMA, which is being  jointly
developed  with  a local property company, is due to be completed  later  this
year.  Powergen  has  already chosen the site for its East  Midlands  Regional
Headquarters  and we have reached an agreement with Holiday  Express  for  the
development of a 90-bedroom hotel.

Investing in new technology

We made a number of important moves towards using new technology to make
public transport easier to use. Our express coach business was the first
public transport operator to promote and sell its services on the internet.
Since its launch in 1998, the National Express web site has received high
praise and, in a recent independent review, was estimated to be among the top
30 fastest growing web sites in the UK. Sales of coach tickets on the internet
increased three-fold in 1999. We are now building on our internet skills and
experience and are investing in a new web site to be launched this year which
will give passengers access to rail service and fare information and enable
them to buy tickets for all UK rail services on line. The web site will be
extended to enable our customers to buy tickets for all our other UK services

In January 2000, we took a 10% shareholding in PCL, which is introducing a UK-
wide,  multi-modal  travel smartcard. A similar system has  been  successfully
introduced in Hong Kong where the ability to use a single smartcard across the
public  transport network has proved to be a major step in delivering a fully-
integrated  system.  Our travel smartcards, which will have  multi-application
potential, will help us to develop our services to meet passenger needs better
by  giving  us a clearer understanding of their travel patterns.  We  will  be
launching  a pilot smartcard scheme on our buses in Coventry and we will  then
roll out the new technology across the whole of our UK operations.


The  Board regularly reviews the safety of the Group's operations. In 1999  we
commissioned an independent report on the effectiveness of our safety systems.
We  expect to receive this report in the Summer. In addition we established  a
new  Safety Committee of the Board to review, monitor and measure our progress
in  fulfilling our safety responsibilities and to ensure that best practice is
consistently  applied  across the Group. I am confident  that  at  all  levels
across  the  Group  we take our primary responsibility -  the  safety  of  our
passengers  and  employees - extremely seriously and that  our  commitment  to
delivering safe services is an important part of our culture.

Investing In People

Our  most valuable resource is our people. We have capitalised on the  quality
and  strength  of  our  management teams by moving people between  businesses,
disciplines  and, in some cases, countries, with great success. We  could  not
have  achieved  the successes of the past year without the commitment  of  our
people. It is their constant focus on quality, service and safety which  gives
us our competitive edge and I thank them for their contribution to the Group's
ongoing success.

Current Trading and Prospects

The  new year has started in line with our expectations with passenger numbers
continuing  to increase. We can see many opportunities for further  profitable
growth in our markets, including increasing transport privatisation worldwide.

The  SSRA  outlined its objectives for the franchise replacement programme  at
the  end  of  1999 and announced on 8 March this year that our Central  Trains
franchise has been selected for renewal. We welcome this announcement and  are
confident  that National Express can make a major contribution to meeting  the
SSRA's  objectives. We have submitted a range of innovative ideas which  could
help  to  create additional capacity, improve services and stimulate and  cope
with  the  substantial growth which is anticipated over the next two  decades.
Provided  we  can be satisfied that a long term commitment to  passenger  rail
services  can  deliver good returns for our shareholders, we look  forward  to
working  with  the SSRA to make its vision for a railway system for  the  21st
Century become reality.

We  have the quality of management across the Group and the financial headroom
to take full advantage of all these opportunities and look forward to the year
ahead with confidence.

Michael Davies, Chairman
14 March 2000

For the year ended 31 December 1999

                   Total               Total     Total               Total
                  before  Goodwill     after    before  Goodwill     after
                goodwill       and  goodwill  goodwill       and  goodwill
                     and  exceptio       and       and  exceptio       and
                exceptio       nal  exceptio  exceptio       nal  exceptio
                     nal     items       nal       nal     items       nal
                   items      1999     items     items      1998     items
                    1999                1999      1998                1998
          Note        £m        £m        £m           £m        £m        £m

-                1,341.2         -   1,341.2      1,313.0         -   1,313.0

acquisitions       135.5         -     135.5            -         -      -   

 operations            -         -         -          9.4         -       9.4

Turnover    1    1,476.7         -   1,476.7      1,322.4         -   1,322.4

income              10.5         -      10.5          9.5         -       9.5
costs           (1,374.0)   (14.7)  (1,388.7)    (1,236.1)   (10.7)  (1,246.8)
Goodwill               -     (3.3)     (3.3)            -     (0.2)     (0.2)

costs           (1,374.0)   (18.0)  (1,392.0)    (1,236.1)   (10.9)  (1,247.0)
profit             113.2    (18.0)      95.2         95.8    (10.9)      84.9

continuing         101.7    (14.9)      86.8         94.5    (10.9)      83.6

acquisitions        11.5     (3.1)       8.4            -         -         -

discontinued           -         -         -          1.3         -       1.3

            1      113.2    (18.0)      95.2         95.8    (10.9)      84.9
Share of                                                                     
loss of                                                                      
venture                -         -         -        (0.2)         -     (0.2)

Profit on              -       0.2       0.2            -       5.4       5.4
sale of

fixed                  -         -         -            -       4.8       4.8

Profit on                                                                    
s before                                                                     
interest           113.2    (17.8)      95.4         95.6     (0.7)      94.9

(payable)          (5.8)         -     (5.8)          2.1         -       2.1

Profit on                                                                    
taxation           107.4    (17.8)      89.6         97.7     (0.7)      97.0

Tax on                                                                       
profit on                                                                    
services          (27.6)       4.8    (22.8)       (26.4)       3.6    (22.8)

after               79.8    (13.0)      66.8         71.3       2.9      74.2

interest           (0.2)         -     (0.2)            -         -         -

shareholders        79.6    (13.0)      66.6         71.3       2.9      74.2

Dividends         (21.0)         -    (21.0)       (18.1)         -    (18.1)

for the                                                                      
year                58.6    (13.0)      45.6         53.2       2.9      56.1
                      Normalised      Actual    Normalised             Actual
share -diluted 2          62.1p       51.9p       54.8p                57.8p

per   -basic   2                                                               
share                      69.7p       58.3p       63.1p                66.5p

At 31 December 1999

                             1999          1998
             Note              £m            £m
Fixed assets                       
assets                      242.6           9.1
Tangible                    503.8         293.8
in associate                 15.0           6.8
                            761.4         309.7

Stock                        14.8           8.6

Debtors                     216.6         137.6

Cash at bank  4                                
and in hand                 101.0          94.2
                            332.4         240.4
falling due                                    
within one                (394.9)       (274.0)

Net current                                    
liabilities                (62.5)        (33.6)

Total assets                                   
less current                                   
liabilities                 698.9         276.1

falling due                                    
after more                (408.8)        (50.4)
than one

liabilities                (23.1)        (13.8)
and charges
                            267.0         211.9

Called up                                      
share                         5.8           5.7

premium                      35.7          30.4

Capital                      17.0          17.0

capital to                    0.5           0.6
be issued

reserve                      17.9          18.2

Profit and                                     
loss account                185.9         140.0
funds                       262.8         211.9

minority                      4.2             -
                            267.0         211.9

For the year ended 31 December 1999

                          1999           1998
                Note        £m             £m
Net cash inflow  5                           
from operating            95.1           98.2
Interest                   6.2            6.7
Interest paid           (10.1)          (4.3)
element of                                   
finance lease            (0.8)          (0.5)
Return on                                    
investments and                              
servicing of             (4.7)            1.9
UK corporation                               
tax paid                (13.7)          (4.1)
Overseas tax             (2.2)          (0.3)
Taxation                (15.9)          (4.4)
Payments to                                  
intangible                   -          (0.8)
Payments to                                  
acquire                 (97.9)         (52.6)
tangible assets
Receipts from                                
sales of                   7.5            4.3
tangible assets
Purchase of                                  
shares to                                    
satisfy                  (7.8)              -
employee share
Payment to                                   
acquire other            (7.5)          (5.0)
Receipts from                                
the sale of                0.1              -
Receipts from                                
investment in                                
preference                   -            0.1
expenditure and                              
investment             (105.6)         (54.0)
Payments to      3                           
subsidiary             (264.9)          (8.9)
Cash acquired                                
in companies               8.7            0.9
Disposal of                                  
undertakings                 -           12.0
Net cash of                                  
subsidiaries                 -          (1.2)
for businesses           (3.4)          (0.4)
and disposals          (259.6)            2.4
dividends paid          (19.4)         (15.7)
Cash withdrawn                               
from /                                       
(deposited in)             3.9         (11.2)
short term
Management of                                
liquid                     3.9         (11.2)
Issue of share                               
capital                    1.3            3.8
Repayment of                                 
capital element                              
of finance               (4.9)          (2.8)
lease rentals
Repayment of                                 
loan notes               (9.9)          (3.6)
Movement on                                  
bank deposits                                
and loan notes           (0.5)          (0.6)
Loans advanced           373.3           24.2
Loans repaid            (45.9)         (10.6)
Net cash inflow                              
from financing           313.4           10.4
Increase in                7.2           27.6

For the year ended 31 December 1999

                                1999        1998
                                  £m          £m
Profit attributable to                          
members of the parent           66.6        74.2
Exchange differences                            
on retranslation of                             
net assets of                    0.4         0.1

Exchange difference on                          
hedging loan                   (0.4)           -

Total recognised gains                          
and losses for the              66.6        74.3

For the year ended 31 December 1999

                                1999      1998
                                  £m        £m
Total recognised gains          66.6      74.3
and losses
Dividends                     (21.0)    (18.1)
New share capital issued         5.4       3.9
Goodwill write back on             -       6.2
Other goodwill                     -     (0.4)
Shares to be issued            (0.1)     (0.1)
Net addition to                 50.9      65.8
shareholders' funds
Shareholders' funds at 1       211.9     146.1
Shareholders' funds at                        
31 December                    262.8     211.9


1.   Turnover and segmental analysis

The  turnover  of  the Group comprises revenue from road passenger  transport,
airport operations, train passenger services and related activities in the UK,
Australia  and  the  US.    Within  the Trains division,  franchise  agreement
receipts  from  the  Shadow  Strategic  Rail  Authority  and  local  Passenger
Transport Executive services within the West Midlands region and Scotland  are
treated as turnover.  Franchise agreement payments are treated as an operating
cost.  During the year franchise agreement receipts amounted to £468.2m (1998:
£499.1m)  and  £27.9m  (1998:  £nil) from the Victoria  Department  of  Public
Transport in Australia.

Turnover and operating profit are analysed as follows:
                                 Operating profit
                       Turnover       exceptional
                                        items and
                    1999   1998     1999     1998
                      £m     £m       £m       £m
UK Buses                                         
-                  196.4  190.1     47.6     43.8

UK Trains                                        
-                  921.8  918.1     28.0     25.9

-                  167.7  163.8     10.9     10.3

-                    0.5      -      0.1        -

-                      -    9.4        -      1.3

                   168.2  173.2     11.0     11.6
-                   33.9   32.7     12.9     12.5
UK                1,320.3 1,314.1   99.5     93.8

-                   21.4    8.4      2.3      2.0

-                   43.2      -      7.2        -
                    64.6    8.4      9.5      2.0
-                   91.8      -      4.2        -

                  1,476.7 1,322.5  113.2     95.8
of joint                                         
venture                -  (0.1)        -        -

                  1,476.7 1,322.4  113.2     95.8
(see                              (14.7)   (10.7)
Goodwill                           (3.3)    (0.2)
                                    95.2     84.9

Exceptional items can be
analysed as follows:

                  UK      UK     UK    US            
                Buses Trains Airports      Other Total
New Trains         -     4.9      -     -     -   4.9
Year 2000          -       -      -     -   2.1   2.1
Reorganisation   1.5     5.8    0.2   0.2     -   7.7

                 1.5    10.7    0.2   0.2   2.1  14.7

New Trains         -     0.9      -     -     -   0.9
Year 2000          -       -      -     -   1.0   1.0
Reorganisation   1.2     7.5    0.1     -     -   8.8

                 1.2     8.4    0.1     -   1.0  10.7

2.   Earnings per share
Basic earnings per share:
The  calculation  of basic earnings per share is based on earnings  of  £66.6m
(1998:  £74.2m) and on 114,232,918 (1998: 111,638,886) ordinary shares,  being
the weighted average number of ordinary shares in issue in the year.

Basic normalised earnings per share:
The  calculation of basic normalised earnings per share is based on normalised
earnings  of  £79.6m  (1998:  £70.4m) and on 114,232,918  (1998:  111,638,886)
ordinary shares, being the weighted average number of ordinary shares in issue
in the year.

Diluted earnings per share:
The  calculation of diluted earnings per share is based on earnings of  £66.6m
(1998: £74.2m).  An adjustment has been made to the weighted average number of
ordinary  shares to reflect the number of dilutive potential ordinary  shares.
The  weighted  average diluted number of shares in issue during the  year  was
128,266,998 (1998: 128,404,691).

Diluted normalised earnings per share:
The  calculation  of  diluted  normalised  earnings  per  share  is  based  on
normalised  earnings  of  £79.6m (1998: £70.4m) and on  the  weighted  average
number  of potential dilutive ordinary shares in issue during the year,  which
was 128,266,998 (1998: 128,404,691).

The normalised profits after tax and minority interest is summarised below:

                                1999       1998
                                  £m         £m
Profit after tax and                           
minority interest               66.6       74.2
Exceptional costs               10.7        7.2
Release of provision                           
against a fixed asset              -      (4.8)
Profit on sale of                              
investments /                  (0.2)      (5.4)
Discontinued                       -      (0.9)
Goodwill                         2.5        0.1
Normalised profits              79.6       70.4

3.   Acquisitions during the year

During  the  year the group acquired the entire share capital of Robinson  Bus
Services Inc (2 February 1999), National Bus Company Pty Limited (7 May 1999),
Transport Management Group Pty Limited (31 May 1999), Kenneth E Bauman Inc (31
July 1999), Durham Transportation Inc (13 August 1999), National Express Group
Australia  (Bayside Trains) Pty Limited (1 September 1999),  National  Express
Group  Australia  (Swanston  Trams) Pty Limited (1 September  1999),  National
Express  Group  Australia (V/Line Passengers) Pty Limited (1 September  1999),
MultiSystems  Inc  (13 December 1999) and ATC Group (30 December  1999).   The
group  also  acquired  the assets and liabilities of  various  coach  division

                   Durham     ATC  Other  Tota
           Transportation   Group            l
                       £m      £m     £m    £m
Cash                111.2   106.7   44.1  262.0
Other acquisition     1.0     0.3    1.6   2.9
Shares issued           -       -    4.1   4.1
Deferred                -     0.9    4.7   5.6
Total cost of                                 
investment          112.2   107.9   54.5  274.6
Net assets           26.5    11.5      -  38.0
Goodwill on          85.7    96.4   54.5  236.6
The net assets acquired are as follows:
              Book  Fair value      Fair
             value  Adjustments    value
                                to Group
                £m          £m        £m
  assets       9.9       (9.9)         -
assets       134.3           -     134.3
Investments    2.7           -       2.7
Stock          5.4           -       5.4
Debtors       47.2       (1.4)      45.8
Cash          10.4           -      10.4
Total        209.9      (11.3)     198.6
overdrafts    (1.7)           -     (1.7)

within      (67.6)           -    (67.6)
one year

due after                               
more than                               
one year    (77.3)           -    (77.3)

liabilities (146.6)           -   (146.6)
Provisions   (15.5)         5.5    (10.0)
interest     (4.0)           -     (4.0)
Net           43.8       (5.8)      38.0

The net debt acquired (including cash and bank overdrafts) amounted to £30.2m.

4.   Net (borrowings) / cash

                            1999           1998
                              £m             £m
Loan notes                (10.3)         (10.6)
Bank loans               (382.9)         (42.0)
Other loans                (0.5)              -
Bank overdrafts            (4.5)          (2.0)
Finance leases            (18.7)          (4.5)
                         (416.9)         (59.1)
Cash at bank in             20.9            5.4
Overnight                   45.0           50.8
Other short                                    
term deposits               32.0           35.6
Bank deposits                                  
relating to                                    
loan notes                   3.1            2.4

                           101.0           94.2
(borrowings) /           (315.9)           35.1
Gearing                     118%            n/a

5.   Cash flow statement

The reconciliation of operating profit to net cash inflow from operating
activities is shown below:

              operations Acquisitions Total      
                    1999      1999    1999     1998
                     £m         £m     £m       £m
profit             86.8        8.4   95.2     84.9
tangible           20.4        6.2   26.6     17.5

of                  0.4        2.9    3.3        -

Profit on                                         
sale of                                           
tangible          (1.2)      (1.2)  (2.4)    (0.8)

/ decrease                                        
in stocks         (0.8)          -  (0.8)      0.8
Increase in                                       
debtors          (21.7)     (10.0)  (31.7)   (21.3)
Increase /                                        
in                 15.4     (11.2)    4.2     15.5

Increase in                                       
provisions          0.7          -    0.7      1.6

Net cash                                          
inflow from                                       
activities        100.0      (4.9)   95.1     98.2

6.   Outstanding litigation

On  19  June  1998 Atlantic Express Transportation Group Inc.  issued  a  writ
against  the Group claiming breach of confidentiality.  The claim  is  for  an
amount in excess of $75.0m.  Based on legal advice that the Group has a strong
defence,  no  provision has been made in these accounts and the Directors  are
vigorously defending the claim.

The preliminary announcement is an abridged version of the full accounts upon
which the auditors have given an unqualified opinion.  The full accounts will
be filed with the Registrar of Companies in due course.