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GB Railways Grp PLC (GBR)

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Thursday 08 June, 2000

GB Railways Grp PLC

Final Results

GB Railways Group PLC
8 June 2000

                  GB RAILWAYS GROUP PLC

    Preliminary Results for the year ended 31 March 2000

Financial highlights
                                 Year to      Year to
                            31 March 2000   31 March 1999

Turnover                           £86.9m      £87.2m

(Loss) / profit before tax        (£1.0m)       £1.8m
(Loss) / profit after tax         (£0.7m)       £1.2m
Shareholders' funds at end of year
 per share                          93.6p      103.1p
(Loss) / earnings per share         (8.0p)      13.8p

Operational highlights

Anglia Railways Passenger miles  -  419m (up 6.1%)

Anglia Railways Passenger's      -  reliability 99.5% (target 99%)
Charter performance                 
                                 -  punctuality (main line
                                    services) 90.7% (target 91.0%)
                                 -  punctuality (local services)
                                    93.3% (target 91.0%)
             Appointment of Finance Director

The company announces the appointment of Richard Drake
FCMA as Finance Director.  He will join the Board of GB
Railways Group Plc effective 3 July, 2000. From 1995 to
March this year, Richard was Finance and Commercial
Director of Tulip International (UK) Ltd.


GB Railways Group Plc
Jeremy Long, Deputy Chairman
 & Chief Executive                      Tel: 020 7465 9013

Bell Pottinger Financial
Bob Gregory or Mark Way                 Tel: 020 7353 9203


GB Railways Group Plc owns passenger and freight railway
businesses in Britain.

Through its wholly owned subsidiary Anglia Railways Train
Services Limited it operates passenger train services  in
Eastern  England,  including  the  InterCity  route  from
London  to  Ipswich  and  Norwich  and  connecting  local
services  in East Anglia.  From May 2000, Anglia Railways
has  operated  the new London Crosslink  service  between
East Anglia, Surrey and Hampshire.

GB  Railways  has established GB Railfreight  Limited  to
provide  rail  freight  services  in  Britain.   It   has
recently gained an eight year contract to carry materials
for Railtrack Plc with services commencing in March 2001.

GB Railways holds an 80% interest in Hull Trains Company
Limited which is securing rights to operate a new direct
service between London Kings Cross and Kingston-upon-
Hull.  Services are expected to commence in September

The Company is actively pursuing other opportunities in
passenger and freight railway businesses in the UK and

Chairman's Statement and Review of Operations

I am pleased to present the results for GB Railways Group
Plc for the year ended 31 March 2000.  It has been an
eventful and, at times, difficult year and we have been
busy positioning the Group to prosper in future years.

Whilst the serious rail accident near Paddington Station
in London last year did not involve GB Railways or our
operating subsidiary, Anglia Railways, it has
understandably focussed national attention on safety.
The Deputy Prime Minister has appointed Sir David Davies
to independently assess rail safety systems.  He may
recommend accelerated installation of new equipment
including the Train Protection Warning system ('TPWS') or
Automatic Train Protection.  Our new trains are already
compatible with TPWS technology. Cost implications for
Anglia Railways are being assessed but are unlikely to be

We inherited a strong safety culture within the business
and we have always focussed special attention on safety
issues.  Notwithstanding the recent accident, rail
remains the safest form of transport, and safety remains
an absolute priority within our business.

Revenues, including subsidy, for the year ended 31 March
2000 were £86.9 million (1999 £87.2m) with a loss before
tax of £1.0 million (1999 £1.8m profit).  Passenger
journeys increased at Anglia Railways by 8% and passenger
income increased by 6%.  However, the loss was caused by
a combination of difficulties experienced at Anglia
Railways as the result of the late delivery of new trains
and a £2.6m reduction in the subsidy reported in the
accounts.  The results include a profit of £1.4 million
on the disposal of the Group's 19.7% interest in Great
Southern Railway Limited (GSR), comprising an exceptional
profit of £1.1 million together with £0.3 million
proceeds equivalent to management fee income to the date
of disposal. The loss per share for the year was 8.0p
(1999 13.8p earnings per share). In the circumstances the
Directors are not recommending the payment of a final
dividend in addition to the 1.5p net per share interim
payment (1999 5.5p total dividend).

Anglia Railways
In January, some 10 months later than contracted, Anglia
Railways accepted its eighth and final new class 170/2-
diesel train.   We still met our franchise commitment to
acquire new trains.  However, the late delivery meant
that our operations team had to utilise other, somewhat
inferior, rolling stock.  The new trains are now all in
service and refurbishment of our mainline fleet is almost

About half of Anglia Railways' passenger income is earned
on the major flows between Ipswich, Colchester,
Manningtree and London. Most tickets are inter-available
and valid on our trains and those of our competitor Great
Eastern. Income is allocated between Anglia Railways and
Great Eastern on the basis of passenger surveys, which
are conducted for each new semi-annual timetable. This
system has worked satisfactorily for almost three years.
However, there were serious technical problems with the
survey for the winter 1999-2000 timetable period. This,
we believe, resulted in Anglia not being allocated the
correct share of revenue. Discussions are underway with
Great Eastern and Rail Settlement Plan (the industry
clearing house) and a new survey has been conducted. If a
satisfactory resolution cannot be reached we will
institute proceedings pursuant to the industry
arbitration rules with a view to recovering revenue.

While most of our services continue to be operated with
trains and infrastructure inherited from British Rail, we
have continued to improve performance. It is a credit to
our operations team that they were able to maintain
reliability for both mainline and local services at
99.4%, well above the Passengers Charter target of 99%.
Punctuality on local services improved, to 93.3% from
91.9% against a Charter target of 91%. However, mainline
punctuality decreased slightly to 90.7% from 91.5%,
slightly below the Charter target of 91%, although above
the trigger of 88% at which compensation is payable.

During the year Anglia Railways received its third
Charter Mark Award for excellence in, and improvements
to, customer service.  Anglia Railways is the only train
operating company to have received three Charter Marks
and I take this opportunity to congratulate the Anglia
Railways employees who all contributed to this success.
In July 1999 Anglia Railways was awarded its third Cycle
Mark Award, again the only train operating company to
receive this.  The company was also named runner-up in
the 'Train Operator of the Year' category at the 1999
Rail Business Awards and has been shortlisted for the
European Rail Operator 2000 award.

London Crosslink
In December, Anglia Railways was awarded a grant of £2.8
million over three years, one of the first awarded under
the Government's Rail Passenger Partnership scheme. This
is for the introduction of our new direct London
Crosslink service between East Anglia and Basingstoke,
which commenced in May 2000. Most trains call at
Chelmsford, Stratford, Highbury & Islington, West
Hampstead, Feltham, Woking, Farnborough and Basingstoke.
There is a shuttle bus link from Feltham to Heathrow, and
connections to many other train services, making round
London journeys easier.

Great Southern Railway, Australia
It was with mixed emotions that in October we announced
the sale of our 19.7% interest in GSR. In line with our
original business strategy, the loss making business,
which was acquired from the Australian Government, was re-
structured and refocused.  We substantially increased
services and increased revenues by about 50%.  With the
turnaround virtually complete, we accepted an offer from
one of our consortium partners, a subsidiary of Serco
Group plc.  The transaction resulted in a pre-tax profit
of £1.4m, a return of 62% on our investment. We enjoyed
the opportunity to secure the future of an Australian
'icon' while adding value to our shareholders. We wish
continued success to Serco and the team at GSR.

Hull Trains
In September we plan to commence a new service between
Hull and London through our 80% owned subsidiary Hull
Trains Company Limited.  Hull Trains will become the
first new passenger train operator since rail
privatisation.  Hull Trains is in discussions with
Railtrack for a longer term access agreement, which will
enable Hull Trains to order high-speed trains for the
service. Until high-speed trains can be acquired, Hull
Trains will lease class 170 units from Anglia Railways.

East West Rail Consortium
In May we announced that we had entered into a Memorandum
of Understanding with the East West Rail Consortium, to
promote the East West Railway scheme. The Consortium
brings together more than 30 local authorities and
business groups.  The East West Railway scheme involves
upgrading existing lines, reopening closed lines, and
building short sections of new rail line. It would create
a direct rail route from East Anglia to Oxford, avoiding
congested lines through London and linking Norwich,
Ipswich, Cambridge, Milton Keynes and Oxford. Railtrack
has estimated the capital costs of the entire scheme at
£237 million.

As a first step, we have jointly submitted an application
for Rail Passenger Partnership funding to re-open the
Oxford - Bletchley Railway. Initially, we expect to
operate a service every hour in each direction between
Oxford and Bletchley, with typical journey times of about
50 minutes. We are also developing plans to construct the
missing link between Bedford and Cambridge. Anglia
Railways already operates services from Cambridge to
Ipswich and Felixstowe.

In April we launched GB Railfreight Limited, with the
announcement of an 8-year contract hauling materials for
Railtrack. We have ordered 7 new class 66 locomotives
from General Motors, and services will begin in March
2001. Revenues will be approximately £5 million per
annum. Our freight team are presently in discussions with
other potential customers and we are optimistic that
there will be further announcements in due course.

During the year we were named by the Government of
Estonia as preferred bidder to acquire Edelaraudtee A.S,
which operates the domestic passenger network, and
freight railway services and track in the southwestern
part of the country. Negotiations continue and we are
hopeful that final terms can be agreed soon.

Franchise Renewal
During the year, the shadow Strategic Rail Authority
announced that it intended to negotiate new franchise
agreements, extending for up to 20 years. The intention
is to secure greater investment in the railway industry,
in line with the Government's transport policies. In
early 2000 we submitted proposals to extend the Anglia
Railways franchise, and also for new and enhanced
services in other areas. We expect to enter into detailed
negotiations with the sSRA over the coming months on our
plans, which could lead to GB Railways securing
significant long-term agreements for Anglia Railways and
other franchises.  Our existing franchise rights to 2004
are unaffected.

Anglia Railways will face a reduction of £6.9 million
subsidy in the current year.  Given the residual effects
of its difficulties in revenue experienced last year and
start-up costs for our new operations, this will result
in a loss for the Group.  Together with GB Railfreight,
Hull Trains, Estonia, the East West Railway, franchise
replacement and our other initiatives, prospects for the
Group are exciting and I am confident for the overall

On behalf of the Board and shareholders I would like to
thank all our employees for their efforts in the past

Lord Sheppard of Didgemere
Consolidated profit and loss account for the year ended
31 March 2000

                                            Unaudited       Audited
                                           Year ended     Year ended
                                         31 March 2000  31 March 1999

                                Notes           £'000        £'000

Turnover                          2            86,949       87,219

Operating expenditure                          89,678       86,439
                                            ---------    ---------

Operating (loss) / profit                      (2,729)         780

Exceptional profit on sale of
 investment                                     1,120            -
                                            ---------    ---------

(Loss) / profit on ordinary activities
 before interest & other income                (1,609)         780

Interest receivable and similar income            598          998
                                            ---------    ---------

(Loss) / profit on ordinary activities
 before taxation                               (1,011)       1,778

Taxation on (loss) / profit on
 ordinary activities                              310         (567)
                                            ---------     --------

(Loss) / profit on ordinary activities
 after taxation                                   (701)      1,211

Dividends                         3               (131)       (481)
                                             ---------    --------

(Accumulated loss)/retained profit for the        (832)        730
 financial period
                                             =========    ========

Basic (loss)/earnings per share   4              (8.0p)       13.8p
                                             =========    ========

Diluted (loss)/earnings per share 4              (8.0p)       13.8p
                                             =========    ========

All amounts relate to continuing activities.

There are no other recognised gains and losses other than
the (loss)/profit for the year.


Consolidated balance sheet at 31 March 2000

                                Unaudited             Audited
                                  2000                 1999
                            £'000     £'000     £'000      £'000
Fixed assets
 Tangible fixed assets               1,867                1,073
 Investments                             -                2,093
                                    --------          ---------
                                     1,867                3,166

Current assets
 Stocks                       648                410
 Debtors                    6,379              4,603
 Bonded cash                5,857              6,581
 Cash at bank and in
  hand                      6,667             10,314
                          -----------      -----------

                           19,551             21,908
Creditors: amounts falling
 due within one year       13,231             16,055
                          -----------      -----------
Net current assets                   6,320                5,853
                                  ----------           ---------

Total assets less current
 liabilities                         8,187                9,019
                                  ----------           ---------

Capital and reserves

 Share capital                          66                   66
 Share premium                       6,309                6,309
 Profit and loss account             1,812                2,644
                                 -----------          ----------

Equity shareholders' funds           8,187                9,019
                                 ===========          ===========


Consolidated cash flow statement for the year ended 31
March 2000

                                             Unaudited   Audited
                                            Year ended   Year ended
                                          31 March 2000  31 March 1999
                                Notes    £'000  £'000   £'000   £'000

Net cash outflow from operating
 activities                       5            (6,138)            (58)

Returns on investments and servicing
 of finance
 Interest received                         578            998
 Dividends received                         20              -
                                       --------       -------

                                                  598             998
Taxation paid
 Corporation and advance corporation
 tax paid                                        (403)           (727)

Capital expenditure and financial investment
 Payments to acquire tangible fixed
  assets                                (1,127)          (348)
 Payments to acquire investment              -           (277)
 Sale proceeds from disposal of fixed
  assets                                    53              -
 Sale proceeds from disposal of
  investment                             3,127              -
                                      --------          ------

Net cash inflow / (outflow) from
 capital expenditure
 and financial investment                       2,053           (625)

Equity dividends paid                            (481)          (569)
                                              --------       --------
Cash outflow before use of liquid resources
 and financing                                 (4,371)          (981)

Management of liquid resources
 Decrease / (increase) in bonded cash             724           (776)
                                              --------       --------

Decrease in net cash in the year               (3,647)        (1,757)
                                              ========       ========


Notes to the Financial Statements

1. Financial Statements
   The financial information set out above does not
   comprise the Company's full statutory accounts for
   the purpose of section 240 of  the Companies Act 1985
   ('the Act'). The consolidated statutory accounts for
   the Company for the year ended 31 March 2000, on
   which the auditors are expected to issue an
   unqualified report, will be delivered to the
   Registrar of Companies following the next annual
   general meeting.  The comparative financial
   information is based on the Company's accounts for
   the year ended 31 March 1999, which have been
   delivered to the Registrar of Companies and on which
   the auditors issued an unqualified report and which
   did not contain a statement under section 237 (2) or
   (4) of the Act.

2  Turnover, profit and net assets

   All turnover, profit and net assets are
   attributable to the Group's principal activity, the
   operation of rail services in the United Kingdom,
   except for the profit realised from the disposal of
   the investment in Great Southern Railway.

   Turnover is analysed as follows:
                             Year ended  Year ended
                          31 March 2000  31 March 1999
                                  £'000       £'000

      Passenger income           56,162      52,837
      Other income                6,496       7,458
                                 ------     -------
                                 62,658      60,295
      Revenue grant              24,291      26,924
                                -------      ------
                                 86,949      87,219
                                =======      ======

   Where Anglia Railways provides services in competition
   with other rail operators its share of passenger
   income is determined by a survey of passenger numbers.
   Passenger income in the accounts is based on a survey
   carried out in July 1999.  A subsequent survey in
   January 2000 has indicated results adverse to Anglia
   Railways.  The company is challenging the survey on
   the grounds of fundamental errors in the survey
   process and in data acquisition.  It intends to
   vigorously pursue its case and believes that it will
   be successful.

3. Dividends

   The Directors are not recommending the payment of a
   final dividend.

                                         Year ended    Year ended
                                       31 March 2000  31 March 1999
                                              £'000         £'000

Interim dividend paid of 1.5 pence
 per share (1999 - 1.5 pence per share)         131           131

Final dividend nil (1999 - 4 pence
   per share)                                     -           350
                                              -----         -----
Total dividend 1.5 pence per share
 (1999 - 5.5 pence per share)                   131           481

4. (Loss) / earnings per share

   Basic (loss) / earnings per ordinary share have been
   calculated using the weighted average number of shares
   in issue during the period.  The weighted average
   number of equity shares in issue was 8,750,000 (1999 -
   8,750,000) and the (loss) / earnings were (£701,000)
   (1999 -  £1,211,000).

   Diluted (loss) / earnings per share is the same as
   basic (loss) / earnings per share for this year since,
   under FRS 14, none of the subsisting options over
   shares are deemed to be dilutive by reference to the
   average price of the shares during the year.

5. Reconciliation of operating profit to net cash inflow
   from operating activities

                                         Year ended   Year ended
                                      31 March 2000  31 March 1999
                                           £'000          £'000

    Operating (loss) / profit             (2,729)           780
    Depreciation charges                     153             99
    Loss on exchange                          86             28
    Loss on disposal of fixed assets          17              -
    (Increase) / decrease in stocks         (238)             1
    (Increase) / decrease in debtors      (1,703)           564
    Decrease in creditors                 (1,724)        (1,530)
                                       ----------     ----------
    Net cash outflow from operating
      activities                          (6,138)           (58)
                                       ==========      =========

6.   Annual Report and Accounts

The report and accounts will be sent to shareholders in
July 2000.  Copies will be available by writing to the
Company Secretary, GB Railways Group Plc, 15-25 Artillery
Lane, London,  E1 7HA.


a d v e r t i s e m e n t