Financial Express (Holdings) Limited (“we”, “our”, “us” and derivatives) are committed to protecting and respecting your privacy. This Privacy Policy, together with our Terms of Use, sets out the basis on which any personal data that we collect from you, or that you provide to us, will be processed by us relating to your use of any of the below websites (“sites”).

  • FEAnalytics.com
  • FEInvest.net
  • FETransmission.com
  • Investegate.co.uk
  • Trustnet.hk
  • Trustnetoffshore.com
  • Trustnetmiddleeast.com

For the purposes of the Data Protection Act 1998, the data controller is Trustnet Limited of 2nd Floor, Golden House, 30 Great Pulteney Street, London, W1F 9NN. Our nominated representative for the purpose of this Act is Kirsty Witter.

WHAT INFORMATION DO WE COLLECT ABOUT YOU?

We collect information about you when you register with us or use any of our websites / services. Part of the registration process may include entering personal details & details of your investments.

We may collect information about your computer, including where available your operating system, browser version, domain name and IP address and details of the website that you came from, in order to improve this site.

You confirm that all information you supply is accurate.

COOKIES

In order to provide personalised services to and analyse site traffic, we may use a cookie file which is stored on your browser or the hard drive of your computer. Some of the cookies we use are essential for the sites to operate and may be used to deliver you different content, depending on the type of investor you are.

You can block cookies by activating the setting on your browser which allows you to refuse the setting of all or some cookies. However, if you use your browser settings to block all cookies (including essential cookies) you may not be able to access all or part of our sites. Unless you have adjusted your browser setting so that it will refuse cookies, our system will issue cookies as soon as you visit our sites.

HOW WE USE INFORMATION

We store and use information you provide as follows:

  • to present content effectively;
  • to provide you with information, products or services that you request from us or which may interest you, tailored to your specific interests, where you have consented to be contacted for such purposes;
  • to carry out our obligations arising from any contracts between you and us;
  • to enable you to participate in interactive features of our service, when you choose to do so;
  • to notify you about changes to our service;
  • to improve our content by tracking group information that describes the habits, usage, patterns and demographics of our customers.

We may also send you emails to provide information and keep you up to date with developments on our sites. It is our policy to have instructions on how to unsubscribe so that you will not receive any future e-mails. You can change your e-mail address at any time.

In order to provide support on the usage of our tools, our support team need access to all information provided in relation to the tool.

We will not disclose your name, email address or postal address or any data that could identify you to any third party without first receiving your permission.

However, you agree that we may disclose to any regulatory authority to which we are subject and to any investment exchange on which we may deal or to its related clearing house (or to investigators, inspectors or agents appointed by them), or to any person empowered to require such information by or under any legal enactment, any information they may request or require relating to you, or if relevant, any of your clients.

You agree that we may pass on information obtained under Money Laundering legislation as we consider necessary to comply with reporting requirements under such legislation.

ACCESS TO YOUR INFORMATION AND CORRECTION

We want to ensure that the personal information we hold about you is accurate and up to date. You may ask us to correct or remove information that is inaccurate.

You have the right under data protection legislation to access information held about you. If you wish to receive a copy of any personal information we hold, please write to us at 3rd Floor, Hollywood House, Church Street East, Woking, GU21 6HJ. Any access request may be subject to a fee of £10 to meet our costs in providing you with details of the information we hold about you.

WHERE WE STORE YOUR PERSONAL DATA

The data that we collect from you may be transferred to, and stored at, a destination outside the European Economic Area (“EEA”). It may be processed by staff operating outside the EEA who work for us or for one of our suppliers. Such staff may be engaged in, amongst other things, the provision of support services. By submitting your personal data, you agree to this transfer, storing and processing. We will take all steps reasonably necessary, including the use of encryption, to ensure that your data is treated securely and in accordance with this privacy policy.

Unfortunately, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our sites; any transmission is at your own risk. You will not hold us responsible for any breach of security unless we have been negligent or in wilful default.

CHANGES TO OUR PRIVACY POLICY

Any changes we make to our privacy policy in the future will be posted on this page and, where appropriate, notified to you by e-mail.

OTHER WEBSITES

Our sites contain links to other websites. If you follow a link to any of these websites, please note that these websites have their own privacy policies and that we do not accept any responsibility or liability for these policies. Please check these policies before you submit any personal data to these websites.

CONTACT

If you want more information or have any questions or comments relating to our privacy policy please email publishing@financialexpress.net in the first instance.

 Information  X 
Enter a valid email address

National Express (NEX)

  Print      Mail a friend

Thursday 28 February, 2008

National Express

Final Results

National Express Group PLC
28 February 2008


                           National Express Group PLC

                              Preliminary Results

                      For the year ended 31 December 2007

National Express Group PLC, a leading international public transport group,
operates bus, coach and train services in the UK, bus and coach operations in
Spain and school bus services in North America.

Highlights

                                            2007                2006      Change
                                     -----------         -----------     -------
Revenue                             £2.6 billion        £2.5 billion        +4%
                                     -----------         -----------     -------
Group operating profit            £162.3 million      £141.6 million       +15%
                                     -----------         -----------     -------
Normalised operating profit*      £205.6 million      £184.8 million       +11%
                                     -----------         -----------     -------
Profit before tax                 £149.9 million      £104.1 million       +44%
                                     -----------         -----------     -------
Normalised profit before tax*     £177.0 million      £156.1 million       +13%
                                     -----------         -----------     -------
Operating cash flow**             £196.7 million      £209.7 million        -6%
                                     -----------         -----------     -------
Diluted earnings per share from       
continuing operations                 73.1 pence          52.5 pence       +39%
                                     -----------         -----------     -------
Normalised diluted earnings per       
share*                                83.9 pence          76.5 pence       +10%
                                     -----------         -----------     -------
Final dividend per share              26.4 pence          24.0 pence       +10%
                                     -----------         -----------     -------
Total dividend for the year per      
share                                37.96 pence         34.75 pence        +9%
                                     -----------         -----------     -------
Net debt                          £910.8 million      £438.4 million      +108%


* Normalised results are the statutory results excluding the profit or loss on
  the sale of businesses, exceptional profit or loss on sale of non-current 
  assets and charges for goodwill impairment, intangible asset amortisation, 
  exceptional items and tax relief on qualifying exceptional items.

** Operating cash flow as defined in the Finance Review, before franchise entry
   and exits.

• Results at the top end of market expectations;
• Strong passenger growth in all divisions - 6% in trains, 3% in coaches, 2% in 
  buses and 4% in Spain;
• Completion of the acquisition of Continental Auto for £459.8 million 
  (€659.3 million) to create Spain's leading coach and bus operator;
• Award with launch in December of National Express East Coast franchise;
• Restructuring of UK operations to form one division, releasing £11 million of 
  annualised savings, well underway;
• Record North American bid season and Business Transformation project on 
  course;
• Positive start to 2008; and
• Commitment to increase the Group's dividend by 10% per annum for the next
  three years reflecting the Board's confidence in the Group's future prospects.

Commenting on current trading and prospects, Chairman, David Ross said:

'Over the last year, National Express has undertaken significant change to
deliver a more customer focused service culture, which has contributed to
another year of passenger growth for the Group. Growing awareness of the
positive environmental impact of public transport and population growth within
our core markets continues to support long term growth trends within our
operations.

The acquisition of Continental Auto and the award of the East Coast franchise in
the final quarter of 2007 reinforced our strong market positions in the Spanish
and UK markets. Our diversified portfolio of transport activity provides robust
cash flow, market leading margins and significant opportunities for future
growth. Despite the current economic backdrop, all operations have started the
year well and we have seen no adverse impact on current trading.

Our new dividend policy, announced today, underlines our commitment to
delivering value for shareholders. We remain confident about the Group's
prospects for the year ahead.'

For further information, please contact:

Richard Bowker, Chief Executive
Adam Walker, Finance Director
Nicola Marsden, Director of Group Communications
National Express Group PLC                             020 7506 4324/4333

Neil Bennett/Suzanne Bartch/Brian Hudspith
Maitland                                               020 7379 5151


• There will be an analyst and investor meeting at 0900 hours on 28 February 
  2008 at Merrill Lynch, 2 King Edward Street, London, EC1A 1HQ.
• A webcast of the analyst presentation will be available on our website
  www.nationalexpressgroup.com at 0900 hours on 28 February 2008.
• High resolution images are available for the media to view and download, free 
  of charge, from www.vismedia.co.uk or telephone 020 7613 2555.


                           National Express Group PLC
                              Preliminary Results
                      For the year ended 31 December 2007

Chairman's Statement

National Express Group PLC ('the Group') today reports on trading for the year
ended 31 December 2007. I am delighted to announce that we traded strongly
throughout the year and that our results are at the top end of market
expectations. All divisions provided a healthy contribution. We have delivered
10% earnings growth and increased the Group margin to 7.9%.

Safety continues to be of paramount importance to us. During 2007 we saw two
serious coach accidents, one tragically involving the loss of three lives. Our
condolences and thoughts remain with those families affected. In our Coach
business, as with all our operations, our policy is one of continuous
improvement in safety.

We have restructured our three UK Divisions into a single UK business. This will
enable us to put much greater focus on the needs of our customers and be more
responsive to new opportunities. We are well on track to deliver the £11 million
of annualised savings from this project and we are already seeing the benefits
of a much more integrated approach to product and service design and delivery.

Our trains business has seen revenue growth of 11%. We believe the addition of
National Express East Coast ('NXEC'), the UK's premier railway business, to our
trains portfolio significantly strengthens our position in the key long distance
market.

Our bus business delivered revenue growth of 7% and we are particularly pleased
that the voluntary partnerships we have entered into with Centro in the West
Midlands are already delivering strong passenger growth on some of these routes
of up to 10%. We are already working on the next network of services, which we
expect to launch in April this year.

Coach travel is the most environmentally friendly form of transport with the
lowest carbon emissions of any motorised mode. Our coach business has had
another outstanding year, both on core scheduled routes as well as on new
products related to supporting events at major venues. Scheduled coach revenue
growth has been 6%.

In North America, our Business Transformation project is on track and will
deliver significant efficiencies and improved stability of earnings. This will
make us the most efficient and competitive North American school bus operation,
with a goal to attract those school boards yet to outsource their operations. We
remain on course to offer school boards the best value and safest product in the
market.

Our Spanish bus and coach operations traded well with passenger growth of 4%.
Our acquisition of Continental Auto makes us the number one private operator of
public transport services in Spain. Continental Auto's complementary set of
geographical routes and business segments especially commuter buses and urban
transport, positions us very well for future growth and further market
liberalisation, particularly in urban bus and rail. The acquisition of
Continental Auto is the largest acquisition the Group has made to date and we
are making good progress with the integration and are on track to deliver the
benefits and returns we announced at the time of the acquisition.

It is clear that there is an opportunity to create value through developing
closer relationships through greater communications with our UK customers. We
have started to roll out our masterbrand strategy across all our UK operations
enabling our customers to relate to the wide range of services that we offer,
leveraging the greater awareness of the National Express brand. We have begun to
address a broader range of opportunities to grow our top line including events
related activities. Other sales & marketing initiatives are also starting to
show real success and growth. In 2007 we ran a series of marketing campaigns
aimed purely at our rail customers. From a database of 150,000 customers we
generated incremental profit of around £1 million representing a return on
investment of 100%. In 2008 we will broaden this activity to our NXEC, National
Express East Anglia and coach customers, a combined database of over 2.3 million
customers. In November our focus on improving the quality of our services was
recognised when we won the business to business category at the UK Customer
Service Experience Awards, which identify and recognise industry leaders in
customer service, featured in the Sunday Times. The award recognised the Group's
efforts to increase customer satisfaction in every part of the business.

It is becoming clear that wider recognition of the environmental credentials of
public transport over the car and the plane is contributing to the increased use
of our services. Businesses, as well as consumers, are becoming more focused on
reducing their carbon footprint for travel and we are developing a range of
corporate products to encourage this.

With the changes in the Group's portfolio during the year, I would like to thank
all our people for their efforts during the year to deliver an excellent set of
results. I also welcome those new employees who have recently joined us and also
to thank those who have left the Group during the year. It is down to the
efforts and commitment of our people that we are able to further develop this
Group and improve our customer offering in the markets where we operate.

Board changes

Following a further strengthening of the Board in October when Roger Devlin was
appointed as a non executive director, Sue Lyons retired in November after six
years service as a non executive director. On behalf of the Board I would like
to thank Sue for her invaluable contribution particularly in her role as
Chairman of the Safety Committee. In November Adam Walker, Group Finance
Director, announced he would be leaving the Group after seven years. Adam was
promoted to the Board back in 2003. He has made a significant contribution to
the strategic development of the Group and overseen our entry into new markets
such as Spain. Adam will be leaving the Group on 26 March and the Board wish him
well in his next role. The recruitment process for a successor is well advanced.

Outlook and current trading

Over the last year, National Express has undertaken significant change to
deliver a more customer focused service culture, which has contributed to
another year of passenger growth for the Group. Growing awareness of the
positive environmental impact of public transport and population growth within
our core markets continues to support long term growth trends within our
operations.

The acquisition of Continental Auto and the award of the East Coast franchise in
the final quarter of 2007 reinforced our strong market positions in the Spanish
and UK markets. Our diversified portfolio of transport activity provides robust
cash flow, market leading margins and significant opportunities for future
growth. Despite the current economic backdrop, all operations have started the
year well and we have seen no adverse impact on current trading.

Our new dividend policy, announced today, underlines our commitment to
delivering value for shareholders. We remain confident about the Group's
prospects for the year ahead.

Results and Dividend

Revenue was £2.6 billion (2006: £2.5 billion) and normalised Group operating
profit was £205.6 million (2006: £184.8 million). After interest and the Group's
share of profits from associated undertakings, normalised profit before tax was
£177.0 million (2006: £156.1 million). Normalised diluted earnings per share
from continuing operations were 83.9 pence (2006: 76.5 pence).

We are recommending a final dividend of 26.4 pence per ordinary share (2006:
24.0 pence), an increase of 10%, to be paid on 9 May 2008 to shareholders on the
register at 25 April 2008. Including the interim dividend, the proposed total
dividend for the year is 37.96 pence (2006: 34.75 pence).

Based on the Board's confidence in the Group's prospects and the greater
visibility of rail earnings following the completion of the recent round of rail
franchising, we have announced today a commitment to increase our dividend by
10% per annum for the next three years. This reflects the Board's confidence in
the Group's future prospects.

Operational Review

UK highlights

• Passenger growth of 6% in trains, 3% coaches and 2% in buses;
• Award with launch in December of National Express East Coast franchise
• Sales & marketing initiatives to drive top line growth taking place across all 
  UK operations with early signs of success and value creation;
• Bus Partnership launched in West Midlands with encouraging signs of
  substantial growth;
• Masterbrand strategy rolling across UK operations;
• Rail businesses continue to lead the industry performance tables;
• Launch of National Express Dot2Dot; and
• Restructuring of UK operations to form one division, releasing £11 million of 
  annualised savings, well underway.

Overseas highlights

• Completion of the acquisition of Continental Auto, one of Spain's leading 
  coach and bus operators, for £459.8 million (€659.3 million);
• Passenger growth in Spain of 4%;
• Record bid season in North America with over $38 million of new business won 
  and over 95% of existing business retained;
• North American Business Transformation project on course to deliver first 
  benefits in 2008; and
• Sale of Stewart airport completed.

Trains

We operate c2c, Gatwick Express, National Express East Anglia including the
Stansted Express, and National Express East Coast. We provide 218 million
passenger journeys per year and employ 7,500 people.

Revenue for the year was £1,472.1 million (2006: £1,497.6 million) with
normalised operating profit of £63.3 million (2006: £49.1 million). These
results were ahead of expectations and reflect strong passenger growth
throughout the year. There were excellent contributions from one railway,
recently renamed National Express East Anglia ('NXEA'), and Midland Mainline,
reflecting the growth that can be achieved in long distance railways when
performance levels are sustained. This is particularly encouraging given that
National Express East Coast ('NXEC') joined the Group in December 2007.

The reduction in revenue reflects the three franchises that left the Group in
November: Central Trains, Midland Mainline and Silverlink. This also impacts the
cash outflow from this business in 2007 and 2008.

We saw strong passenger growth of 6%. We believe that growth has been driven by
a number of factors, including performance. Our franchises lead the way in the
performance league tables with c2c and Gatwick Express at the top of the tables.
c2c is the best performing railway in Britain and this continued high
performance is attracting good levels of additional off peak business. At NXEA
we have improved punctuality from 87.4% to over 90% - its best year for the
franchise to date. This has been achieved by implementing joint performance
improvement plans with Network Rail and managing their delivery.

During the year we incurred bid costs of £7.5 million (2006: £9.8 million). We
were delighted to be awarded the premier East Coast franchise in August and
started running the service on 9 December. This new franchise, which runs until
2015, will receive an investment of £44.0 million. We have made an immediate and
positive impact in terms of customer service such as introducing free wi-fi
internet access for all customers, not just first class and we are making the
100 day joint improvement plan with Network Rail, a top priority. We know from
experience elsewhere that improving performance leads to more passengers
travelling on our services. Further improvements will be introduced including
real time running information accessible by mobile phone; print at home tickets;
a website which will enable total journey booking including parking and onward
connections in a single visit; and Smartcard ticketing. In addition more and
faster services are scheduled from 2010, with the addition of five more trains
to the fleet and a further 25 services providing 14,000 extra seats daily.

Another major contributor to our strong revenue performance has been our focus
on yield management and pricing strategies. Our industry leading yield
management capability at Midland Mainline enabled us to sell otherwise
under-utilised capacity and this strategy has enabled us to maximise yield
across a wide range of tickets and related services. We have brought all the
technology and experience gathered around the Group to the NXEC franchise.

As agreed with the Department for Transport in April last year, Gatwick Express
will leave our portfolio in June 2008 prior to the competition for the Southern
franchise, which we will enter, being announced later in the year.

Buses

We operate over 2,000 buses, providing approximately 390 million passenger
journeys and employ 7,250 people in the West Midlands, Dundee and London. We
also operate the Midland Metro, the light rail service in the West Midlands.

Revenue for the year was £322.3 million (2006: £300.8 million) and normalised
operating profit was £43.5 million (2006: £40.7 million). Profits have increased
in our bus division for the first time since 2001 and margins have been
maintained at 13.5%.

In order to stimulate growth and encourage customer loyalty and repeat journeys,
we did not increase the price of a number of our travelcard products in 2007. We
achieved 2% passenger growth in our deregulated services with increases in both
concessionary and non concessionary passengers.

We were delighted to sign a ground breaking voluntary partnership with Centro to
deliver improved performance and customer satisfaction on six key routes through
Birmingham, Walsall and West Bromwich. We have set ourselves demanding targets
and, despite only starting the first of the routes in November, we have already
seen year on year passenger growth of up to 10% on these routes. These
partnership routes provide more frequent services, improved infrastructure, new
or refurbished vehicles with the latest CCTV systems and improvements to
timetables and employee training. The success has given both the Group and
Centro real confidence to develop further ambitious partnership schemes. A new
jointly agreed network for Dudley, which covers approximately 40 routes, will be
rolled out in April this year and it is intended that this will form the basis
of a wider partnership scheme.

Our London operations account for a quarter of our overall bus revenues and we
have been pleased to be awarded four new contracts during the period by
Transport for London. In December we introduced five hybrid fuel vehicles into
the Travel London fleet to operate on the 127 service between North Greenwich
and the Cutty Sark in south east London. These vehicles use up to 40% less fuel.
In mid February 2008 we received planning permission for the redevelopment of
the Battersea bus depot in London which will see a doubling of capacity at this
site.

Travel Dundee performed well in the period. It was awarded the 2007 Scottish
Disability and Business Award in November for driver training on disability and
its contribution to community work with a range of community groups in the city.
This award followed Travel Dundee becoming the first UK based urban bus company
to have 100% low-floor easy- access vehicles in 2004.

Coaches

National Express coaches provide Britain's only scheduled national coach network
and serves more than 1,000 destinations, providing approximately 19 million
passenger journeys each year. Eurolines offers value for money European travel
by coach. The division employs over 2,100 people. National Express Dot2Dot was
launched in 2007 operating over 70 vehicles in the south east.

Revenue for the year was £231.0 million (2006: £207.3 million) with a normalised
operating profit of £23.1 million (2006: £23.7 million). As expected for a start
up business, National Express Dot2Dot incurred losses in 2007 of £4.8 million on
revenue of £3.1 million. In the rest of our coaches business, we have grown our
top line and increased our margin through segmentation of our product and
enhanced yield management.

Coaches experienced an excellent trading year with passenger growth of 3%. This
was achieved by the use of yield management, fare innovations and changes in our
service offering. We have increased direct sales within the business with
internet sales accounting for 35% of all transactions. We believe that greater
use of self service ticket kiosks, which are now installed in the majority of
our major coach stations, will continue to reduce our costs within the business.
Our investment in our retail systems has enabled us to accelerate the roll out
of yield management across the network, with £1 funfares now offered on more
than 50 popular routes.

We are continuing to grow our business around special events and venues where
public transport is required and travel by private car is discouraged. This year
we created a unique network offering customers direct coach services to Wembley
Stadium to enable them to attend both sporting and music events. We carried
around 1,000 people to each event at Wembley since the start of our association.
We have developed similar arrangements with other venues such as the Millennium
Stadium and Twickenham.

We believe that coach has a very strong role to play in Britain's future
transport strategy and are encouraged by the increasing support we are receiving
from Government and stakeholders around the country. We are responding to that
support by developing and implementing a wide range of innovative products and
services. In the summer we trialed a new commuter service operating between
Milton Keynes and Canary Wharf in London. The service, which offers a direct and
low cost alternative to rail travel, provides free wi-fi, seat back tables,
electrical plugs, GPS tracking and leather seats. Customers are texted with up
to date information about their services. The trial has gone extremely well and
we are now rolling out this concept to other parts of the UK where commuter
flows exist. We extended our knowledge of the commuter coach market through the
acquisition of the Kings Ferry Travel Group in November. Kings Ferry is a well
established Kent based coach operator providing popular commuter travel services
in London and the South of England as well as providing a wide range of contract
management services in the bus and coach sector.

During the year we became the first coach company to fit new child friendly
areas, with child seatbelts. Existing coaches were fitted with eight seats
offering height adjustable seat belts for children and isofix fixings for child
car seats. All new coaches will have these facilities provided.

The redevelopment and transformation of our main coach hub, Digbeth, in
Birmingham is well underway and we await planning permission. During the second
half of the year we completed a seamless move to a new temporary site near
Digbeth. The redevelopment is on schedule to be completed by early 2010.

In November we launched National Express Dot2Dot, a high quality, on demand,
shared ride product, targeted primarily at the business to business market
although with significant capability for the business to consumer market as
well. It currently has over 70 vehicles within its fleet. The start up of
operations has gone well and customer satisfaction ratings are amongst the
highest we have ever seen for any public transport type service.

North America

The North American division consists of student transportation. It operates over
15,000 buses. The division employs over 19,000 people.

Revenue in the division for the year was £308.0 million (2006: £283.7 million)
and normalised operating profit was £37.7 million (2006: £39.1 million). In
local currency, revenue was US$617.5 million (2006: US$524.0 million) and
normalised operating profit was US$75.5 million (2006: US$72.3 million). As
previously announced, the expiry of a fuel hedge caused an increase in North
America fuel costs of $13 million in 2007.

Following the successful sale of Stewart airport in October, we are now focused
on school bus provision. Our school bus operations performed well during the
year despite the increasingly competitive landscape. Whilst 2006 had seen our
best bidding season, 2007 surpassed this record with $38 million of new business
being won and a retention rate of more than 95% of contracts. Following our
entry into two new states, Tennesse and South Carolina, the division now
operates in 27 states and two Canadian provinces. During the period we acquired
three small bolt-on operations which were integrated into the business. We are
currently seeing lower levels of business coming out to tender, partly because
of the cycle of contracts coming up for expiry and also because the competitive
landscape is going through a period of change. Even so, we are well placed to be
successful in the bidding opportunities that arise.

Our Business Transformation initiative is focused on changing our business in
order to create the highest margin and highest quality school bus business in
North America. By fundamentally differentiating ourselves from others and with a
focus on quality of service, we aim to compete more effectively, including being
uniquely positioned to develop conversion opportunities. Business Transformation
is about how to work smarter and more efficiently, how to respond to new
competitors and look at creative ways to grow our business. We are also
investing in systems and tools which meet the demands of our planned growth.
During 2008, we will spend $31 million and expect net benefits to arise in 2009.
Full year benefit will commence in 2010. To complement our Business
Transformation we are formalising our environmental practices by creating an
industry leading environmental strategy.

As with all our businesses, safety is our prime concern and we were delighted to
see a further significant improvement in preventable accidents in 2007 from an
already low base.

Spain

We are Spain's leading private operator of coach and bus services. The division
provides nearly 144 million passenger journeys per annum and employs over 6,400
people.

Revenue was £298.0 million (2006: £249.3 million) and normalised operating
profit was £50.9 million (2006: £44.3 million). In local currency revenue was
€434.9 million (2006: €365.6 million) and normalised profit was €74.3 million
(2006: €65.0 million). 2007 results include a three month contribution from
Continental Auto. Trading improved in the second half of 2007 and we achieved a
full year margin of 17.1%.

Following the successful acquisition of Continental Auto, we reinforced our
position as the number one private transport operator in Spain. We believe that
this positions us well to access new market opportunities in Spain as well as
driving a more sales and marketing orientated agenda in our existing businesses.
Continental Auto has a higher proportion of urban and commuter services which
balance the long distance services which is the largest part of Alsa. The
integration of Continental Auto is proceeding to plan both in terms of timing
and synergies delivered, adjusting and optimising resources. Already we have
fully integrated finance, sales and routing systems and implemented our safety
management and financial control procedures within Continental Auto. We are in
the process of consolidating maintenance facilities and the fleet purchasing
process.

During 2007 we negotiated the extension of a number of contracts which now means
we do not have a single concession expiring before 2013. Competition pressures
exist within the market however we have responded to the entry of low cost
airlines and the development of high speed rail by varying our frequency,
adapting our prices and altering our network to provide complementary services.

In addition we secured non regulated work outside the formal concessionary
arrangements which we believe arises from having the scale of operations and the
expertise to deliver on a timely and consistent basis.

We are developing our product offering in the market. In October we launched the
new Supra class incorporating a revised on-board catering offering and on-board
wi-fi, being the first transport mode in Spain to incorporate this facility. In
addition we launched a new loyalty card Bus Plus which provides loyalty benefit
to our customers and etickets were rolled out on long distance routes. We are
also reviewing our overall distribution costs and are pleased that now 15% of
all sales for long distance and regional services are via the internet.

With over 60% of the Spanish transport market represented by bus and coach, we
believe there are plenty of opportunities for growth particularly in the urban
bus market. We also believe that when future liberalisation of the public
transport market in Spain occurs, we are well positioned to bring our experience
and market presence to bear.

Finance Review

Year at a glance

We have continued our track record of delivering strong financial results.
Profit before tax increased by 44.0% to £149.9m (2006: £104.1m), driven by a
14.6% increase in operating profit to £162.3m (2006: £141.6m). Basic earnings
per share from continuing operations improved 39.4% to 73.6p (2006: 52.8p).

Our financial key performance indicators are based on normalised results, which
we feel reflect the performance of the business more appropriately. Normalised
results are defined as the statutory result before the following, as
appropriate: profit or loss on the sale of businesses, exceptional profit or
loss on the disposal of non-current assets and charges for goodwill impairment,
intangible asset amortisation, exceptional items and tax relief thereon as
appropriate.

Normalised group operating profit was up by 11.3% to £205.6m (2006: £184.8m), on
revenue of £2,615.4m (2006: £2,525.5m) resulting in an increased operating
margin of 7.9% (2006: 7.3%). Normalised profit before tax increased by 13.4% to
£177.0m (2006: £156.1m), driving a 9.7% increase in normalised diluted earnings
per share to 83.9p (2006: 76.5p).

Reflecting this earnings growth and the Board's confidence for its future
prospects, the proposed final dividend per share will be increased by 10.0% to
26.40p (2006: 24.0p). This results in a full year dividend per share of 37.96p
(2006: 34.75p), an increase of 9.2%.

Net debt increased by £472.4m to £910.8m (2006: £438.4m), with £481.9m of the
increase resulting from our acquisition of Continental Auto in Spain.

Divisional review

Commentary on the divisional results is included in the Operational Review
above. Specific financial points to note are included below.

Trains

Revenue decreased 2% as a result of franchises leaving the Group. Normalising
the result for franchise exits, revenue increased by 11%.

The business margin has improved to 4.3% (2006: 3.3%). The Central Trains,
Silverlink and Midland Mainline franchises expired in November 2007, and as part
of the DfT re-mapping exercise, Gatwick Express leaves the Group in June 2008.
The settlement of working capital balances in respect of Trains franchises that
have finished will continue to result in operating cash outflows.

Coaches

The trading results for the start up business National Express Dot2Dot were in
line with the business plan, with revenue of £3.1m resulting in an operating
loss of £4.8m. This has been reported as part of the UK Coach results.
Consequently on a life for like basis the Coach margins increase to 12.2% (2006:
11.4%).

Spain

In local currency, we generated normalised operating profit of €74.3m (2006:
€65.0m) on revenue of €434.9m (2006: €365.6m). We are pleased to have maintained
our margins above 17%.

The integration of Continental Auto into Alsa is a major project covering the
systems for sales, vehicle maintenance and financial reporting. We started this
project as soon as the sale completed in October and expect it to be completed
by mid-2008. The valuation work on intangibles and key assets will be included
in the 30 June 2008 balance sheet in accordance with IFRS 3, 'Business
Combinations'.

North America

In local currency, North America increased normalised operating profit to
US$75.5m (2006: US$72.3m). Revenue has increased by 18% to US$617.5m (2006:
US$524.0m).

As reported in last year's results, historic fuel hedges that were in place
ended in 2006, which resulted in US$13m increase in the cost base in 2007. This
resulted in a lower margin of 12.2% (2006: 13.8%).

Following the Group's announcement of the planned sale of the operating lease on
Stewart International Airport, the assets and related liabilities of the
disposal group were separately identified in the 2006 balance sheet, in
accordance with IFRS 5, 'Non-current assets held for sale and discontinued
operations'. The business did not meet the definition of a discontinued
operation, therefore the results, which do not make a significant contribution,
are included within continuing operations in 2007 and 2006.

Fuel

We use fuel swaps to hedge short term movements in the fuel price. These swaps
cover a number of different positions including ULSD and gasoil in the UK,
heating oil in North America and Euro denominated ULSD in Spain. For 2008 and
2009 we have hedged 58% and 31% of our volumes respectively.

Joint ventures and Associates

The Group has a number of associates and joint ventures in Spain and holds a 40%
investment in Inter-Capital and Regional Rail Limited ('ICRRL').

The results of the associates and joint ventures in Spain were a profit of £0.6m
(2006: £0.2m) and a loss of £0.2m (2006: £0.2m loss) respectively.

The Group's Eurostar contract with ICRRL was designated an onerous contract in
2006. As a result there is no charge to the income statement in 2007, but in
2006 the total charge was £29.6m, comprising our share of the ICRRL result of
£3.9m and a £25.7m exceptional charge for the onerous contract. We have provided
for the Eurostar losses to the end of the contract in 2010.

Finance cost

Net finance costs increased to £29.0m (2006: £24.9m), reflecting the £481.9m
increase in net debt following the acquisition of Continental Auto in October
2007.

Included in the net finance cost is a £3.0m (2006: £2.1m) charge to unwind the
discounting on provisions, most notably the ICRRL onerous contract. Adjusting
for the discounting charge and comparing to normalised operating profit before
depreciation and other non-cash items ('EBITDA') of £282.9 (2006: £264.0m), the
EBITDA finance cover was 10.9 times (2006: 11.6 times).

Amortisation of Intangible assets

Amortisation of £27.5m (2006: £27.8m) was charged on the intangible asset that
arises from the Group's right to operate its rail franchises £1.1m (2006: £1.6m)
and on contracts acquired in Alsa £20.2m (2006: £20.1m), UK Bus £1.1m (2006:
£1.6m) and North America £5.1m (2006: £4.5m).

Exceptional items

Exceptional charges totalled £15.8m, incurred on the Business Transformation
program in North America (£8.2m), UK Integration program (£4.2m), the
Continental Auto integration (£2.6m) and the NXEC franchise mobilisation
(£0.8m).

In 2006, exceptional items totalled a net income of £4.8m, comprising a credit
of £6.7m in relation to defined benefit pension liabilities and charges of £1.9m
in relation to the integration of Alsa.

The £16.2m profit on disposal of non-current assets arises from the sale of the
operating lease on Stewart International Airport in October 2007. The £16.9m
profit in 2006 resulted from the disposal a 14% shareholding in Trainline
Holdings Limited (£9.4m) and the disposal of a car park in Sheffield (£7.5m).

Taxation

The total tax charge of £37.6m (2006: £23.6m) on profit before tax of £149.9m
(2006: £104.1m) represents an effective rate of 25.1% (2006: 22.7%).

The tax charge on normalised profit of £177.0m (2006: £156.1m) was £48.1m (2006:
£39.2m), which represents an effective rate of 27.2% (2006: 25.1%). Reductions
in jurisdictional tax rates mean that the expected tax rate on normalised profit
before tax decreased by 1.0% to 31.3%. However, the effective tax rate has
increased by 2.1% to 27.2% due to the expiry of certain tax efficient financing
arrangements.

The total tax charge includes a tax credit on exceptional items of £10.5m (2006:
£15.6m) which includes the deferred tax benefit of the Group's non-deductible
intangible asset amortisation.

Discontinued operations

An additional provision of £6.3m was recognised in relation to the Group's
Public Transit business which was disposed of in 2005. The Group provided an
indemnity to the purchaser at the time of the disposal regarding an industry
employment issue in California. The issue is close to resolution and this charge
reflects the Directors' best estimate of the Group's liability. The charge of
£2.9m on the face of the income statement comprises £6.3m of additional
liabilities in relation to the disposed operations, offset by a tax credit of
£3.4m.

Cash flow

The Group continues to generate strong cash flow with normalised operating
profit of £205.6m (2006: £184.8m) converted into operating cash flow before
one-offs of £196.7m (2006: £209.7m). Net cash inflow from operations of £300.6m
(2006: £297.1m) is then used to maintain high levels of investment across the
Group, particularly in North America where capital expenditure is required for
contract wins.


Operating Cash Flow
                                                North
                       UK       UK       UK  American           Central
                      Bus    Coach   Trains       Bus  Europe functions   Total
                       £m       £m       £m        £m      £m        £m      £m
Normalised
operating profit     43.5     23.1     63.3      37.7    50.9     (12.9)  205.6
Depreciation         17.0      4.8     15.9      25.9    15.4       0.6    79.6
Amortisation of
leasehold
property
prepayment            0.1        -        -         -       -         -     0.1
Amortisation of
fixed asset
grants               (0.1)       -     (0.8)        -    (0.4)        -    (1.3)
Profit on
disposal              0.1     (0.2)    (2.8)     (0.6)   (0.8)        -    (4.3)
Share based
payments              0.3      0.2      0.6       0.4     0.2       1.5     3.2
                    ------  -------   ------  --------  ------  -------- -------
EBITDA               60.9     27.9     76.2      63.4    65.3     (10.8)  282.9
Working capital
movement             (9.5)    (0.1)    43.1      (3.6)    1.5     (13.7)   17.7
                    ------  -------   ------  --------  ------  -------- -------
Net cash inflow
from operations      51.4     27.8    119.3      59.8    66.8     (24.5)  300.6
Net capital
expenditure         (22.3)    (9.6)    (6.1)    (45.1)  (20.3)     (0.5) (103.9)
                    ------  -------   ------  --------  ------  -------- -------
Operating cash
flow before
one-offs             29.1     18.2    113.2      14.7    46.5     (25.0)  196.7

UK Train
franchise entry
and exits                                                                 (31.9)
                                                                         -------
Operating cash
flow                                                                      164.8


Operating cash flow is intended to be the cash flow equivalent to normalised
operating profit. To reconcile the operating cash flow to the statutory cash
flow the following items are included: 'Cash generated from operations' plus
'Proceeds from disposal of property, plant and equipment' less 'Finance lease
additions' and 'Purchase of property, plant and equipment' as set out in note 10
and the cash flow statement. The non-operating items are then excluded which
comprise £8.4m payment to associates and £11.3m payments in relation to other
exceptional items.

The working capital outflow in UK Bus comprises payments to the defined benefit
pension schemes in excess of the income statement charge and the losses
associated with the onerous contracts in our London business. The working
capital inflow in UK Trains arises from a number of items including working
capital phasing and non-cash charges at NXEC incurred in the franchise entry.
The working capital outflow in Central Functions arises from the reversal of
prior year working capital inflows and the settlement of foreign currency swaps.

Net capital expenditure was £103.9m (2006: £87.4m) including £0.2m (2006:
£20.7m) of additions purchased under finance leases and £15.4m (2006: £6.8m) of
proceeds from disposals.

The net operating cash outflow in respect of TOC franchise entry and exits was
£31.9m (2006: £27.7m) comprising cash flows in respect of working capital and
property, plant and equipment.


Reconciliation of net debt                                  2007          2006
                                                              £m            £m
                                                           ------        ------
Operating cash flow                                        164.8         182.0
Exceptional cash flow                                      (11.3)         (2.0)
Exceptional property proceeds                                  -          13.0
Payments to associates                                      (8.4)         (8.4)
Receipt in respect of investments                           10.7             -
Net interest                                               (23.4)        (20.6)
Dividends paid to minority interests                        (0.1)            -
Taxation                                                   (18.8)         (9.0)
                                                           ------        ------
Free cash flow                                             113.5         155.0
Share buy back                                                 -         (11.6)
Financial investments & shares                               5.5          15.8
Acquisitions and disposals                                (482.1)        (16.8)
Dividends                                                  (53.9)        (49.7)
                                                          -------        ------
Net funds flow                                            (417.0)         92.7
Foreign exchange                                           (55.4)         32.3
                                                          -------        ------
Funds flow post exchange                                  (472.4)        125.0
Opening net debt                                          (438.4)       (563.4)
                                                          -------        ------
Closing net debt                                          (910.8)       (438.4)
                                                         

Payments to associates of £8.4m (2006: £8.4m) represent the annual outflow in
respect of the ICRRL onerous contract. In 2007 £10.7m was received on the
redemption of preference shares following the completion the Channel Tunnel Rail
Link.

Net interest paid of £23.4m (2006: £20.6m) comprises the cash outflow of £22.5m
(2006: £19.7m) adjusted for loan fee amortisation of £0.9m (2006: £0.9m). The
increase in interest paid follows the acquisition of Continental Auto in October
2007.

As disclosed last year, the 2006 tax payments were reduced by the receipt of tax
rebates in respect of prior years.

Acquisitions and disposals in the year increased net debt by £482.1m,
principally due to the £481.9m increase resulting from the acquisition of
Continental Auto. Three bolt-on acquisitions in North America and the
acquisition of the Kings Ferry Group and Hotelink in the UK were funded by the
disposal of Stewart Airport in North America.

Movements in foreign currency exchange rates increased net debt by £55.4m
principally due to the strengthening of the Euro. The increase in net debt due
to exchange is hedged by a corresponding increase in our net investment in Euro
denominated assets.

Dividend

A final dividend of 26.40p per share will be paid in May 2008, bringing the
total dividend for the year to 37.96p. This is a 9.2% increase in total
dividends declared compared to 2006 reflecting the 9.7% increase in normalised
diluted earnings per share. This dividend is covered 2.2 times (2006: 2.2 times)
by normalised profits after tax.

In light of the consistent nature of our rail portfolio for the medium term and
based on the Board's confidence in the Group's future prospects, it is proposed
to announce a three year commitment on dividend growth of 10% per annum.

Liquidity

At 31 December 2007, the Group had two bank debt facilities: an £800 million
revolving credit facility maturing in June 2011 and a €500m term loan facility
expiring in April 2008. At 31 December 2007, the headroom under the facility was
£199.4m (2006: £247.8m). The Group has complied with all of its banking
covenants in the year.

Since year end we have replaced the €500m term loan facility with a €540m term
loan facility expiring in February 2009 with a one year extension to February
2010 at the Group's option.


NATIONAL EXPRESS GROUP PLC
GROUP INCOME STATEMENT
For the year ended 31 December 2007


                      Total before                            Total before
                          goodwill      Goodwill                  goodwill      Goodwill
                       impairment,   impairment,               impairment,   impairment,
                        intangible    intangible                intangible    intangible
                      amortisation  amortisation              amortisation  amortisation
                               and           and                       and           and
                       exceptional   exceptional               exceptional   exceptional
                             items         items       Total         items         items       Total
                              2007          2007        2007          2006          2006        2006
                Note            £m            £m          £m            £m            £m          £m
                          --------       -------      ------       -------       -------      ------
Continuing
Operations
Revenue            3       2,615.4             -     2,615.4       2,525.5             -     2,525.5
                          --------       -------      ------       -------       -------      ------
Operating
costs before
goodwill
impairment,
intangible
amortisation &
exceptional
items                     (2,409.8)            -    (2,409.8)     (2,340.7)            -    (2,340.7)
Goodwill
impairment         3             -             -           -             -         (20.2)      (20.2)
Intangible
amortisation       3             -         (27.5)      (27.5)            -         (27.8)      (27.8)
Exceptional
items              3             -         (15.8)      (15.8)            -           4.8         4.8
                          --------       -------     -------       -------       -------     -------
Total
operating
costs                     (2,409.8)        (43.3)   (2,453.1)     (2,340.7)        (43.2)   (2,383.9)
                ----      --------       -------     -------       -------       -------     -------
Group
operating
profit                       205.6         (43.3)      162.3         184.8         (43.2)      141.6
Profit on
disposal of
non-current
assets             3             -          16.2        16.2             -          16.9        16.9
                ----      --------       -------     -------       -------       -------     -------
Profit from
operations                   205.6         (27.1)      178.5         184.8         (26.3)      158.5
Share of post
tax results
from
associates and
joint ventures
accounted for
using the
equity method                  0.4             -         0.4          (3.8)        (25.7)      (29.5)
Finance income     4          17.0             -        17.0          12.4             -        12.4
Finance costs      4         (46.0)            -       (46.0)        (37.3)            -       (37.3)
                ----      --------       -------     -------       -------       -------     -------
Profit before
tax                          177.0         (27.1)      149.9         156.1         (52.0)      104.1
Tax expense        5         (48.1)         10.5       (37.6)        (39.2)         15.6       (23.6)
                ----      --------       -------     -------       -------       -------     -------
Profit after
tax for the
year from
continuing
operations                   128.9         (16.6)      112.3         116.9         (36.4)       80.5
Loss for the
year from
discontinued
operations                       -          (2.9)       (2.9)            -          (3.2)       (3.2)
                ----      --------       -------     -------       -------       -------     -------
Profit for the
year                         128.9         (19.5)      109.4         116.9         (39.6)       77.3
                          --------       -------     -------       -------       -------     -------
Profit
attributable
to equity
shareholders                 128.4         (19.5)      108.9         116.1         (39.6)       76.5
Profit
attributable
to minority
interests                      0.5             -         0.5           0.8             -         0.8
                          --------       -------     -------       -------       -------     -------
                             128.9         (19.5)      109.4         116.9         (39.6)       77.3
                ----      --------       -------     -------       -------       -------     -------

Earnings per
share:
- basic
earnings per
share              7                                    71.7p                                   50.7p
- diluted
earnings per
share              7                                    71.2p                                   50.4p

Normalised earnings
per share:
- basic
earnings per
share              7         84.5p                                   77.0p
- diluted
earnings per
share              7         83.9p                                   76.5p

Earnings per share 
from continuing
operations:
- basic
earnings per
 share             7                                    73.6p                                   52.8p
 - diluted
earnings per
share              7                                    73.1p                                   52.5p
                  ----      --------       -------     -------       -------       -------     -------
Dividends per
ordinary share:
- interim          6                                   11.56p                                  10.75p
- final            6                                   26.40p                                  24.00p
                  ----      --------       -------     -------       -------       -------     -------
                                                       37.96p                                  34.75p


Dividends of £54.0m were declared and payable during the year (2006: £50.1m).
Dividends of £57.8m were proposed for approval during the year (2006: £52.5m).


NATIONAL EXPRESS GROUP PLC
GROUP BALANCE SHEET
At 31 December 2007

                                                                   2007         2006
                                                        Note         £m           £m
                                                        -----  ----------  -----------
Assets
Non-current assets
Intangible assets                                               1,173.9        697.6
Property, plant and
equipment                                                         678.7        501.9
Financial assets - Available for sale                               7.2         13.5
                 - Derivative financial 
                   instruments                                      5.3          0.3
Investments accounted
for using the equity
method                                                             11.8          8.7
Other receivables                                                  10.0          4.1
Deferred tax asset                                                    -         10.6
                                                        -----  ----------  -----------
                                                                1,886.9      1,236.7
                                                        -----  ----------  -----------
Current assets
Inventories                                                        20.0         15.5
Trade and other
receivables                                                       272.4        272.3
Financial assets - Derivative financial 
                   instruments                                     10.0          8.1
Current tax assets                                                  9.5         26.4
Cash and cash
equivalents                                                       157.2        143.6
                                                        -----  ----------  -----------
                                                                  469.1        465.9
                                                        -----  ----------  -----------
Disposal group assets
classified as held
for sale                                                              -         20.1
                                                        -----  ----------  -----------
Total assets                                                    2,356.0      1,722.7
                                                        -----  ----------  -----------
Non-current liabilities
Financial liabilities - Borrowings                               (641.6)      (538.4)
                      - Derivative financial                       
                        instruments                                (5.4)        (8.3)
Deferred tax
liability                                                        (104.0)       (84.3)
Other non-current
liabilities                                                        (3.7)        (3.0)
Defined benefit
pension liability                                         8       (29.8)       (52.8)
Provisions                                                        (43.5)       (61.3)
                                                        -----  ----------  -----------
                                                                 (828.0)      (748.1)
                                                        -----  ----------  -----------
Current liabilities
Trade and other
payables                                                         (573.3)      (518.4)
Financial                                                        
liabilities - Borrowings                                         (426.4)       (43.6)
            - Derivative financial                                
              instruments                                         (17.7)        (6.4)
Current tax
liabilities                                                       (24.7)       (40.9)
Provisions                                                        (44.8)       (17.4)
                                                        -----  ----------  -----------
                                                               (1,086.9)      (626.7)
                                                        -----  ----------  -----------
Liabilities directly
associated with
disposal group assets
classified as held
for sale                                                              -         (2.4)
                                                        -----  ----------  -----------
Total liabilities                                              (1,914.9)    (1,377.2)
                                                        -----  ----------  -----------
Net assets                                                        441.1        345.5
                                                        -----  ----------  -----------
Shareholders' equity
Called up share
capital                                                   9         7.7          7.7
Share premium account                                     9       195.3        189.8
Capital redemption
reserve                                                   9         0.2          0.2
Own shares                                                9       (16.3)       (16.7)
Other reserves                                            9        30.7          7.9
Retained earnings                                         9       219.6        153.3
                                                        -----  ----------  -----------
Total shareholders'
equity                                                            437.2        342.2
Minority interest in
equity                                                    9         3.9          3.3
                                                        -----  ----------  -----------
Total equity                                                      441.1        345.5
                                                        

NATIONAL EXPRESS GROUP PLC
GROUP STATEMENT OF CASH FLOWS
For the year ended 31 December 2007

                                                      Note     2007       2006
                                                                 £m         £m
                                                     -----  ---------  ---------
Cash generated from operations                        11      272.1      254.5
Tax paid                                                      (18.8)      (9.0)
                                                     -----  ---------  ---------
Net cash from operating activities                            253.3      245.5
                                                     -----  ---------  ---------
Cash flows from investing activities
Payments to acquire businesses, net of cash                  
acquired                                                     (485.0)     (19.8)
Deferred consideration for businesses acquired                 (1.7)      (3.0)
Purchase of property, plant and equipment                    (149.7)     (73.5)
Proceeds from disposal of property, plant and                  
equipment                                                      22.9       24.3
Payments to acquire available for sale investments                -       (4.6)
Payments to acquire associates                                    -       (1.5)
Receipts from disposal of available for sale                   
investments                                                    10.7       13.2
Receipts from disposal of businesses, net of cash              
disposed                                                       34.3          -
Payments in respect of discontinued operations                 (1.9)         -
Receipts from disposal of intangible assets                       -        1.5
Interest received                                              17.0       12.4
                                                     -----  ---------  ---------
Net cash used in investing activities                        (553.4)     (51.0)
                                                     -----  ---------  ---------
Cash flows from financing activities
Proceeds from issue of ordinary shares                          5.5       15.8
Purchase of treasury shares                                       -      (11.6)
Interest paid                                                 (39.5)     (32.1)
Finance lease principal payments                              (26.3)     (21.5)
Net loans advanced/(repaid)                                   424.9      (89.9)
Loans receivable repaid                                           -        1.0
Dividends paid to minority interests                           (0.1)         -
Dividends paid to shareholders of the Company                 (53.9)     (49.7)
                                                     -----  ---------  ---------
Net cash from/(used in) financing activities                  310.6     (188.0)
                                                     -----  ---------  ---------
Increase in cash and cash equivalents                          10.5        6.5
                                                     -----  ---------  ---------
Opening cash and cash equivalents                             143.6      140.0
Increase in cash and cash equivalents                          10.5        6.5
Foreign exchange                                                3.1       (2.9)
                                                     -----  ---------  ---------
Closing cash and cash equivalents                             157.2      143.6
                                                   

NATIONAL EXPRESS GROUP PLC
GROUP STATEMENT OF RECOGNISED INCOME AND EXPENSE
For the year ended 31 December 2007

                                                      Note     2007       2006
                                                                 £m         £m
                                                     -----  ---------  ---------
Income and expense recognised directly in equity
Exchange differences on retranslation of foreign               
operations                                                     83.2      (55.3)
Exchange differences on retranslation of foreign
currency borrowings                                           (89.1)      46.8
Exchange differences on retranslation of minority               
interests                                                       0.2          -
Actuarial gains on defined benefit pension plans               11.7       20.6
Gain/(loss) on cash flow hedges taken to equity                21.5      (12.1)
                                                     -----  ---------  ---------
                                                               27.5          -
                                                     -----  ---------  ---------

Transfers to the income statement
On cash flow hedges                                            (1.0)       1.6
                                                     -----  ---------  ---------
                                                               (1.0)       1.6
                                                     -----  ---------  ---------

Tax on exchange differences on retranslation of
foreign operations                                             14.3       (1.3)
Tax on share based payments                                     0.4        2.4
Deferred tax on actuarial gains                                (3.5)      (6.2)
Deferred tax on cash flow hedges                               (6.1)       3.7
                                                     -----  ---------  ---------
Tax on items taken directly to or transferred from              
equity                                                         5.1       (1.4)
                                                     -----  ---------  ---------
Net losses recognised directly in equity                       31.6        0.2
Profit for the financial year                                 108.9       76.5
Profit attributable to minority interests                       0.5        0.8
                                                     -----  ---------  ---------
Total recognised income and expense for the year              141.0       77.5
                                                            ---------  ---------
Income and expense attributable to equity                    
shareholders                                                  140.3       76.7
Income attributable to minority interests                       0.7        0.8
                                                            ---------  ---------
                                                              141.0       77.5
                                               

NATIONAL EXPRESS GROUP PLC
NOTES TO THE ACCOUNTS
For the year ended 31 December 2007


1. Basis of preparation

The results have been prepared in accordance with International Financial
Reporting Standards ('IFRS') and the International Financial Reporting
Interpretations Committee's interpretations as adopted by the European Union,
and with those parts of the Companies Act 1985 applicable to companies reporting
under IFRS.

These results have been prepared using the accounting policies set out in the
Group's 2006 statutory accounts.

Normalised results are defined as the statutory results before the following as
appropriate: profit or loss on the sale of businesses, exceptional profit or
loss on the sale of non-current assets and charges for goodwill impairment,
intangible asset amortisation, exceptional items and tax relief on qualifying
exceptional items.

2. Exchange rates

The most significant exchange rates to UK sterling for the Group are as follows:

                             2007            2007             2006            2006
                     Closing rate    Average rate     Closing rate    Average rate
                         ----------      ----------       ----------      ----------
US dollar                    1.98            2.00            1.96             1.85
Canadian dollar              1.98            2.15            2.28             2.09
Euro                         1.36            1.46            1.48             1.47
Australian dollar            2.27            2.39            2.48             2.44


If the results for the year to 31 December 2006 had been retranslated at the
average exchange rates for the year to 31 December 2007, North America would
have achieved normalised operating profit of £36.5m on revenue of £264.5m,
compared to normalised operating profit of £39.1m on revenue of £283.7m as
reported, and Europe would have achieved a normalised operating profit of £44.5m
on revenue of £250.5m, compared to normalised operating profit of £44.3m on
revenue of £249.3m as reported.

3. Segmental analysis

Analysis by class and geography of business

                                                Operating            Operating
                                       Revenue     result   Revenue     result
                                         2007       2007       2006       2006
                                           £m         £m         £m         £m
                                        -------    -------    -------    -------
UK Bus                                  322.3       43.5      300.8       40.7
UK Trains                             1,472.1       63.3    1,497.6       49.1
UK Coach                                231.0       23.1      207.3       23.7
Intercompany elimination                (16.0)         -      (13.2)         -
                                        -------    -------    -------    -------
UK operations                         2,009.4      129.9    1,992.5      113.5
North American Bus                      308.0       37.7      283.7       39.1
European Coach & Bus                    298.0       50.9      249.3       44.3
Central functions                           -      (12.9)         -      (12.1)
                                        -------    -------    -------    -------
Result from continuing operations     2,615.4      205.6    2,525.5      184.8
Goodwill impairment                                    -                 (20.2)
Intangible asset amortisation                      (27.5)                (27.8)
Exceptional items                                  (15.8)                  4.8
                                        -------    -------    -------    -------
Group operating profit                             162.3                 141.6
Profit on disposal of non-current                   
assets                                              16.2                  16.9
                                        -------    -------    -------    -------
Profit from operations                             178.5                 158.5
Share of post tax results from                       
associates                                           0.4                 (29.5)
Net finance costs                                  (29.0)                (24.9)
                                        -------    -------    -------    -------
Profit before tax                                  149.9                 104.1
Tax expense                                        (37.6)                (23.6)
                                        -------    -------    -------    -------
Profit for the year from continuing
operations                                         112.3                  80.5    
Loss from discontinued operations                   (2.9)                 (3.2)
                                        -------    -------    -------    -------
Profit for the year                                109.4                  77.3

Intercompany sales only occur between the Group's UK Divisions.


3. Segmental analysis (continued)

Goodwill impairment, intangible asset amortisation and exceptional items can be
analysed by class and geography of business as follows:

                                 Intangible                
                                      asset        Exceptional  
                               amortisation              items           Total
                                       2007               2007            2007
                                         £m                 £m              £m
                                     --------           --------        --------
UK Bus                                  1.1                0.1             1.2
UK Trains                               1.1                1.8             2.9
UK Coach                                  -                0.3             0.3
North American Bus                      5.1                8.2            13.3
European Coach &
Bus                                    20.2                2.6            22.8
Central functions                         -                2.8             2.8
                                     --------           --------        --------
Total                                  27.5               15.8            43.3
                                 
In the year to 31 December 2007 exceptional costs of £4.2m for UK Integration
were incurred in UK Bus, UK Trains, UK Coach and Central functions. Mobilisation
costs of £0.8m were incurred in National Express East Coast. Integration costs
of £2.6m were incurred in Continental Auto. Business transformation costs of
£8.2m were incurred in North America.

In the year to 31 December 2007 non-operating exceptional items comprise £16.2m
of profit on disposal of the trade and business of Stewart International
Airport.
                                          
                                    Intangible      
                 Goodwill                asset      Exceptional
               Impairment         amortisation            items          Total
                     2006                 2006             2006           2006
                       £m                   £m               £m             £m
                   --------             --------         --------       --------
UK Bus                1.0                  1.6             (4.9)          (2.3)
UK Trains            19.2                  1.6                -           20.8
UK Coach                -                    -             (1.3)          (1.3)
North American
Bus                     -                  4.5                -            4.5
European Coach
& Bus                   -                 20.1              1.9           22.0
Central
functions               -                    -             (0.5)          (0.5)
                   --------             --------         --------       --------
       Total         20.2                 27.8             (4.8)          43.2
                   --------             --------         --------       --------

In the year to 31 December 2006 exceptional income arose in UK Bus, UK Coach and
Central Functions for a past service pension credit. Integration costs of £1.9m
were incurred in Alsa.

In 2006 non-operating exceptional items comprise £7.5m of profit on the disposal
of property and £9.4m of profit on disposal of investments, both items relate to
the UK Trains division.


4. Net finance costs

                                                            2007          2006
                                                              £m            £m
                                                          --------      --------
Bank interest payable                                      (37.9)        (28.2)
Finance lease interest payable                              (5.0)         (7.0)
Other interest payable                                      (0.1)            -
Unwind of provision discounting                             (3.0)         (2.1)
                                                          --------      --------
Finance costs                                              (46.0)        (37.3)
Finance income: Bank interest receivable                    17.0          12.4
                                                          --------      --------
Net finance costs                                          (29.0)        (24.9)
                                                          --------      --------

5. Taxation

Analysis of taxation charge in the year
                                                                2007      2006
                                                                  £m        £m
                                                              --------  --------
Current taxation:
UK corporation tax - continuing operations                      24.9      10.0
Overseas taxation - continuing operations                       11.3       8.8
                                                              --------  --------
Current income tax charge                                       36.2      18.8
Amounts under/(over) provided in prior years - UK               (2.0)     (4.8)
Amounts overprovided in prior years - Overseas                     -      (0.2)
                                                              --------  --------
Total current income tax                                        34.2      13.8

Deferred taxation:
Origination and reversal of temporary differences -
continuing operations                                              -       9.8
                                                              --------  --------
Total tax charge                                                34.2      23.6
                                                              --------  --------

The tax charge in the income statement is disclosed as
follows:
Income tax expense on continuing operations                     37.6      23.6
Income tax credit on discontinued operations                    (3.4)        -
                                                              --------  --------
                                                                34.2      23.6
                                                              --------  --------

The tax expense on continuing operations is disclosed as
follows:
Tax charge on profit before goodwill impairment, intangible
asset amortisation and exceptional items                        48.1      39.2
Tax credit on intangible asset amortisation and exceptional
items                                                          (10.5)    (15.6)
                                                              --------  --------
                                                                37.6      23.6

6. Dividends payable and proposed

Declared and paid during the year                              2007       2006
                                                                 £m         £m
                                                            ---------  ---------
Ordinary final dividend for 2006 paid of 24.00p per share
(2005: 22.25p per share)                                       36.4       33.9

Ordinary interim dividend for 2007 paid of 11.56p per
share (2006: 10.75p per share)                                 17.6       16.2
                                                            ---------  ---------
                                                               54.0       50.1
                                                            ---------  ---------

Proposed for approval (not recognised as a liability at 31
December)                                                   
                                                            ---------  ---------
Ordinary final dividend for 2007 of 26.4p per share (2006:
24.00p per share)                                              40.2       36.3


7. Earnings per share

                                                                2007       2006
                                                            ---------  ---------
Basic earnings per share - continuing operations               73.6p      52.8p
Basic loss per share - discontinued operations                 (1.9p)     (2.1p)
                                                            ---------  ---------
Basic earnings per share - total                               71.7p      50.7p
                                                            ---------  ---------
Normalised basic earnings per share - continuing               
operations                                                     84.5p      77.0p
                                                            ---------  ---------

Diluted earnings per share - continuing operations             73.1p      52.5p
Diluted loss per share - discontinued operations               (1.9p)     (2.1p)
                                                            ---------  ---------
Diluted earnings per share - total                             71.2p      50.4p
                                                            ---------  ---------
Normalised diluted earnings per share - continuing            
operations                                                     83.9p      76.5p
                                                            ---------  ---------

Basic earnings per share is calculated by dividing the earnings attributable to
equity shareholders of £108.9m (2006: £76.5m) by the weighted average number of
ordinary shares in issue during the year, excluding those held by employee share
ownership trusts and those held as treasury shares which are both treated as
cancelled.

For diluted earnings per share, the weighted average number of ordinary shares
in issue during the year is adjusted to include the weighted average number of
ordinary shares that would be issued on the conversion of all the dilutive
potential ordinary shares into ordinary shares.


7. Earnings per share (continued)

The reconciliation of basic and diluted weighted average number of ordinary
shares is as follows:

                                                           2007           2006
                                                      ---------      ---------
Basic weighted average shares                       151,914,241    150,847,303
Adjustment for dilutive potential ordinary shares       976,000        915,923
                                                      ---------      ---------
Diluted weighted average shares                     152,890,241    151,763,226
                                                      ---------      ---------

The normalised basic and normalised diluted earnings per share have been
calculated in addition to the basic and diluted earnings per share required by
IAS 33 since, in the opinion of the Directors, they reflect the underlying
performance of the business's operations more appropriately.

The reconciliation of the earnings and earnings per share to their normalised
equivalent is as follows:

                                      2007     2007              2006     2006
                                     Basic  Diluted             Basic  Diluted
                             2007      EPS      EPS     2006      EPS      EPS
                               £m        p        p       £m        p        p
                            -------  -------  -------  -------  -------  -------
Profit attributable to
equity shareholders         108.9     71.7     71.2     76.5     50.7     50.4
Loss from discontinued
operations                    2.9      1.9      1.9      3.2      2.1      2.1
                            -------  -------  -------  -------  -------  -------
Profit from continuing
operations attributable to
equity shareholders         111.8     73.6     73.1     79.7     52.8     52.5
Goodwill impairment on
continuing operations           -        -        -     20.2     13.4     13.3
Intangible asset
amortisation                 27.5     18.1     18.0     27.8     18.5     18.3
Exceptional charge for
associate onerous contract
provision                       -        -        -     25.7     17.0     16.9
Exceptional items            15.8     10.4     10.3     (4.8)    (3.2)    (3.1)
Profit on disposal of
non-current assets          (16.2)   (10.7)   (10.6)   (16.9)   (11.2)   (11.1)
Tax relief on goodwill and
exceptional items           (10.5)    (6.9)    (6.9)   (15.6)   (10.3)   (10.3)
                            -------  -------  -------  -------  -------  -------
Normalised profit
attributable to equity
shareholders                128.4     84.5     83.9    116.1     77.0     76.5


8. Pensions and other post-employment benefits

The UK Bus and UK Coach divisions operate both funded defined benefit schemes
and a defined contribution scheme. The majority of employees of the UK Train
companies are members of the appropriate shared-cost section of the Railways
Pension Scheme ('RPS'), a funded defined benefit scheme. The assets of all
schemes are held separately from those of the Group. Contributions to the
schemes are determined by independent professionally qualified actuaries.

Subsidiaries in North America contribute to a number of defined contribution
plans. The Group also provides certain additional unfunded post-employment
benefits to employees in North America and Spain, which are disclosed in the
Other category below.

The total pension cost for the year was £27.5m (2006: £23.9m), of which £3.2m
(2006: £3.4m) relates to the defined contribution schemes.

The defined benefit pension liability included in the balance sheet is as
follows:
                                            2007                          2006
                                              £m                            £m
                                        ----------                    ----------
UK Bus                                      (5.1)                        (17.3)
UK Coach                                    (4.9)                        (12.7)
UK Train                                   (18.8)                        (21.1)
Other                                       (1.0)                         (1.7)
                                        ----------                    ----------
Total                                      (29.8)                        (52.8)
                                        ----------                    ----------

9.  Share capital and reserves
       
                                            Capital
                                            redemp-                                           
                   Share          Share        tion         Own           Other  Retained            Minority     Total
                 capital        premium     reserve      shares        reserves  earnings    Total  interests    equity
                      £m             £m          £m          £m              £m        £m       £m         £m        £m
                 -------       --------    ---------    --------        --------  -------   ------      -----    ------ 
At 1
January 2007         7.7          189.8         0.2       (16.7)            7.9     153.3    342.2        3.3     345.5
Shares issued          -            5.5           -           -               -         -      5.5          -       5.5
Own shares
released to
satisfy employee
share schemes          -              -           -         0.4               -      (0.4)       -          -         -
Total
recognised
income and
expense                -              -           -           -            22.8     117.5    140.3        0.7     141.0
Share-based
payments               -              -           -           -               -       3.2      3.2          -       3.2
Dividends              -              -           -           -               -     (54.0)   (54.0)         -     (54.0)
Payments to
minority
interests              -              -           -           -               -         -        -       (0.1)     (0.1)
                --------      ---------    --------    --------        ---------   ------    ------    ------   -------
At 31
December             
2007                 7.7          195.3         0.2       (16.3)           30.7     219.6    437.2        3.9     441.1 

Own shares comprise treasury shares and shares held in the Employee Benefit
Trust.

Treasury shares include 1,825,000 (2006: 1,825,000) ordinary shares in the
Company. During the year, the Group repurchased no (2006: 1,425,000) shares for
consideration of £nil (2006: £11.6m). No additional (2006: 1,425,000) shares
have been retained as treasury shares within equity for future issue under the
Group's share schemes or cancellation. No shares were cancelled during the year
(2006: nil). The market value of these shares at 31 December 2006 was £22.7m
(2006: £20.6m).

Own shares include 447,554 (2006: 663,352) ordinary shares in the Company that
have been purchased by the Trustees of the National Express Employee Benefit
Trust (the 'Trust'). During the year, the Trust purchased no (2006: nil) shares
and 215,798 (2006: 186,105) shares were used to satisfy options granted under a
number of the Company's share schemes. The value of shares within the Trust has
been recognised as an investment in treasury shares. The market value of these
shares at 31 December 2006 was £5.6m (2006: £7.5m). The dividends payable on
these shares have been waived.


10. Net debt

Net debt at 31 December 2007 comprises cash and cash equivalents of £157.2m
(2006: £143.6m), current interest bearing loans and borrowings of £426.4m (2006:
£43.6m) and non-current interest bearing loans and borrowings of £641.6m (2006:
£538.4m).

                  At                                                                  At 31  
           1 January       Cash  Acquisitions/     Exchange            Other       December
                2007       flow      Disposals  Differences        movements           2007
                  £m         £m             £m           £m               £m             £m
               ------    -------       --------      -------       ----------      ---------
Cash            43.7       22.4              -          1.9                -           68.0
Overnight
deposits        21.6       (7.0)             -            -                -           14.6
Other short
term            
deposits        78.3       (4.9)             -          1.2                -           74.6 
               ------    -------       --------      -------       ----------      ---------
Cash and
cash           
equivalents     143.6       10.5              -          3.1                -          157.2
               ------    -------       --------      -------       ----------      ---------
Borrowings:
Loan notes      (0.8)         -              -            -                -           (0.8)
Bank loans    (478.1)    (424.9)          (4.4)       (57.6)            (0.9)        (965.9)
Finance
lease         
obligations   (103.1)      26.3          (23.4)        (0.9)            (0.2)        (101.3) 
               ------    -------       --------      -------       ----------      ---------
              (582.0)    (398.6)         (27.8)       (58.5)            (1.1)      (1,068.0)
               ------    -------       --------      -------       ----------      ---------
Net debt      (438.4)    (388.1)         (27.8)       (55.4)            (1.1)        (910.8)


Short term deposits included within liquid resources relate to term deposits
repayable within three months. Changes in cash and cash equivalents arising from
acquisitions and disposals in the year are disclosed separately on the face of
the cash flow statement.

Other non cash movements in net debt represent finance lease additions of £0.2m
(2006: £20.7m) and £0.9m (2006: £0.9m) amortisation of loan arrangement fees.


11. Cash flow statement

The net cash inflows from operating activities include outflows of £11.3m (2006:
£2.0m) from continuing operations which related to exceptional costs.

The reconciliation of Group profit before tax to cash generated from operations
is as follows:

Total Operations                                               2007       2006
                                                                 £m         £m
                                                            ---------  ---------
Net cash inflow from operating activities
Profit before tax                                             149.9      104.1
Net finance costs                                              29.0       24.9
Profit on disposal of non-current assets                      (16.2)     (16.9)
Share of post tax results from associates and joint            (0.4)      29.5
ventures
Depreciation of property, plant and equipment                  79.6       81.7
Amortisation of leasehold property prepayment                   0.1        0.6
Goodwill impairment                                               -       20.2
Intangible asset amortisation                                  27.5       27.8
Amortisation of property, plant and equipment grants           (1.3)      (2.0)
Profit on disposal of non-current assets (in operating         (4.3)      (3.1)
profit)
Share-based payment                                             3.2        2.0
(Increase)/decrease in inventories                             (2.1)       2.9
Decrease in receivables                                        17.7       27.3
Increase/(decrease) in payables                                 5.9      (21.1)
Decrease in provisions                                        (16.5)     (23.4)
                                                            ---------  ---------
Cash generated from operations                                272.1      254.5
                                                            ---------   --------

12. Financial information

The financial information set out above, which was approved by the Board on 28
February 2008, is derived from the full Group accounts for the year ended 31
December 2007 and does not constitute full accounts within the meaning of
section 240 of the Companies Act (as amended). The Group accounts on which the
auditors have given an unqualified report, which does not contain a statement
under section 237 (2) or (3) of the Companies Act 1995, will be delivered to the
Registrar of Companies in due course.

Copies of the Preliminary Results may be obtained from the Company Secretary at
7 Triton Square, London, NW1 3HG. Copies are also available via
www.nationalexpressgroup.com.

                                    - ENDS -





                      This information is provided by RNS
            The company news service from the London Stock Exchange
     FR EAFAPADKPEEE