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National Express (NEX)

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Friday 24 October, 2008

National Express

Interim Management Statement

RNS Number : 5956G
National Express Group PLC
24 October 2008
 



NATIONAL EXPRESS - INTERIM MANAGEMENT STATEMENT 

24 October 2008 


 

National Express Group plc is today issuing its third quarter Interim Management Statement. 


Trading update - expectations for the full year remain unchanged 


We remain on track for strong year on year earnings growth and management's expectations for the full year remain unchanged. Public transport offers a quality, sustainable and value for money travel option for millions of people. We believe this will become increasingly important in the coming months and years. The travel sector is not immune to the impact of a tougher consumer climate and we will continue to examine our operations to ensure we have minimised costs and maximised efficiencies. 


UK - Trains 


We have achieved year to date like for like revenue growth of 11% on National Express East Coast and 6% on National Express East Anglia resulting in 9% across our whole rail portfolio.


Operational performance on our rail franchises has continued to be excellent, a prerequisite for strong financial performance. Our East Coast franchise achieved 91.2% punctuality in the 4 weeks to 12 October, the highest average achieved in a single month since privatisation in 1996 and positions us well to deliver our franchise commitment. We are particularly pleased with the success of our marketing campaigns across all our franchises which have not only generated substantial revenue but have also brought new customers with the prospect of strong repeat business. 


UK - Bus and Coach


Our bus operations continue to trade well with year to date like for like revenue growth of 7%. We believe this is due to a combination of excellent service, a strong partnership with Centro in the West Midlands and the value for money bus represents compared to the cost of the private car. 


With coach, whilst services to Stansted airport continue to show the slower growth previously noted, our other coach routes have shown strong growth. Year to date, like for like coach revenue is up 5%. 


Dot2Dot


We have taken the decision to exit our Dot2Dot start up operation. As we have highlighted previously, revenue growth has not been as strong as anticipated and we believe that our resources are better focused on our core business at this time.


Spain


In Spain, we have continued the growth we saw in the first half of the year despite the economy in Spain coming under considerable pressure. On some long distance routes, growth has been encouraging and we believe consumers are looking to secure value from public transport in Spain just as much as they are in the UK. Overall, like for like revenue growth remains on track at 5%. 


Our wider strategy to grow revenue is beginning to bear fruit. In particular, our push towards greater use of the internet is proceeding well and our sales and marketing campaigns during the summer have been successful.


North America


Our North American business has a strongly defensive revenue stream and in the recent bidding season we retained more than 95% of our existing contracts.


Our Business Transformation project is progressing well and we are now implementing our pilot project which accounts for 10% of our overall business. This has been achieved alongside yet another excellent start up to the new School Year. We believe that the significant cost savings possible from Business Transformation will help us unlock a meaningful proportion of the 70% of school buses in North America still operated by School districts. 


Financial Position 


National Express Group generates strong underlying cashflow. The Group's balance sheet remains robust and we continue to expect net borrowing at the year end to be in line with previous guidance.


Commenting Richard Bowker, Group Chief Executive, said:


'Year to date, the growth across all our businesses has been strong and we are on track to hit our targets for 2008. The travel industry is not immune to an economic slowdown and we are seeing evidence of consumers becoming increasingly focused on securing the best value for money they can. We remain confident that public transport and the products and services delivered by National Express Group are well placed to deliver the value which consumers are looking for.'



For further information, please contact:    



Richard Bowker, Group Chief Executive 


Gareth Wright, Acting Group Finance Director

+44 (0)20 7506 4324

Nicole Lander, Communications Director    

+44 (0)121 460 8401

 

 


Maitland 

 


Neil Bennett/Suzanne Bartch/Brian Hudspith

+44 (0)20 7379 5151



There will be a conference call for research analysts at 08:00am today, 24 October 2008. For details please contact Rebecca Mitchell at Maitland on +44 20 7379 5151.

 

 

Notes


1.    The revenue growth figures disclosed above are the like for like growth for revenue achieved when comparing the 9 months 30th September 2008 to the 9 months ended 30th September 2007, except for UK trains where the growth compares the 10 rail periods ending 11th October 2008 to the 10 rail periods ending 13th October 2007. For acquisitions and train franchises, the like for like adjustment restates the 2007 result to assume ownership of the business in both periods. Like for like revenue growth is assessed in local currency and is not affected by changes in foreign exchange rates. 




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