National Express profits have plummeted after the loss of one its rail franchises, but the group said its underlying performance was remarkably resilient.
The transport operator’s chief executive, Dean Finch, said the end of the Greater Anglia franchise was bad news they knew had been coming, but added: “Against that backdrop of tough times and unprecedented toughness in Spain, these are a good set of results.”
Revenues dropped below the £1bn mark, down 17% to £934m, but Finch said winning new rail business was not crucial.
National Express is bidding for the Great Western franchise and hopes to hold on to its remaining network, the C2C lines of Essex Thameside. “They are nice to have, they are not a must-have. Our earnings, structure and dividends are predicated on not being in rail,” Finch said.
National Express is pursuing growth in German rail, where it has pre-qualified for four franchises.
Pre-tax profits for the first six months of 2012 dropped 14% to £82m. The Spanish coach operations continued to make a profit, although City analysts described the performance as slightly concerning.
Gerald Khoo, of Execution Noble, said: “A 3% fall in Spanish operating profit is a pretty robust performance given the weakness of the Spanish economy, and revenue grew in all transport segments, but it is a fall nonetheless and will do nothing to reassure those nervous about the group’s exposure to Spain.”
Finch said strikes and the wider financial crisis had hit profits, and claimed: “The resilience of the business – given that backfrop of severe cutbacks in the UK and a very severe recession in Spain – is quite remarkable.”