National Express sees annual profits soar higher amid boost from rail strikes
Shares in National Express surged as the group reported underlying pre-tax profits of £145.9 million, up from £39.7 million in 2021.
The recent wave of train strikes helped National Express more than triple annual profits as passengers switched to buses and coaches to avoid rail disruption.
Shares in National Express soared 13% on Thursday as the group reported underlying pre-tax profits of £145.9 million, up from £39.7 million in 2021, with annual revenues surpassing pre-pandemic levels for the first time since Covid hit.
The group saw revenues jump to a record £2.8 billion, higher than 2019 levels and a more than 24% increase on 2021 on a constant currency basis.
It also resumed shareholder dividends for the first time since 2020, with a 5p-a-share annual payout.
The group said revenues in its coach business more than doubled as it benefited from the ongoing industrial action on rail networks amid a row over pay.
More people are also using coaches to travel to airports and between cities as travel demand recovers, with overall customer numbers soaring by 150% in the division.
It saw a groupwide 23% hike in passenger journeys over the year, despite the first quarter of 2022 being badly impacted by the Omicron wave of Covid.
The firm also flagged its research showing that nearly 10% of new National Express bus customers that used the service during the strikes were continuing to do so on non-strike days.
Ignacio Garat, group chief executive of National Express, said: “After a first quarter that was impacted by Omicron, the resilience and agility of our teams amid a uniquely challenging operating environment meant we saw momentum build across our businesses through the year and continue into 2023.
“Whilst the operating backdrop remains challenging, with inflationary pressures continuing in key markets, we expect to see that momentum continue, driven by growth in passenger numbers, mobilisation of new contracts, a continuing recovery in US school bus and the securing of rate increases during 2023 and 2024 allowing us to recover cost increases.”
The group said the start of 2023 has so far been “encouraging”, with passenger growth across all businesses.
It said hiring remains difficult in a tough wider jobs market, but that it hopes unfilled vacancies to be “negligible” by the summer.
On a statutory basis, National Express reported pre-tax losses widening to £209.9 million from £84.9 million the previous year.
It also revealed a £9.7 million hit from restructuring and other costs, which include fees relating to its failed takeover plans for rival Stagecoach.
In March last year, Stagecoach ditched its backing for a £1.9 billion merger bid from National Express in favour of an an acquisition by German investor DWS Infrastructure.