Freezing winter chills National Express profits

EXTREME freezing winter weather in the US, strikes in Spain and the strength of sterling hit first-half profits at UK-based transport giant National Express, despite it winning £5bn worth of contracts so far this year.

Operating profit fell to £89.5m in the first half of 2014, down from £97.2m over the same period last year, as revenue fell to £939.5m from £956.7m.

The Birmingham-based firm still had a positive outlook despite the impact of one-off events, as underlying group revenue rose 2 per cent, with revenues up across its UK coach, bus and rail services.

Debts at National Express were also reduced further, with £80m in free cash flow in the first half keeping it on course for its full year target of £150m.

Dean Finch, National Express chief executive said “Our strong cash generation remains a highlight and a particular focus of the business this year.”

National Express also had a range of significant contract wins worth £5bn, including its success in retaining the Essex Thameside rail franchise, to be named c2c, renewed for 15 years to 2029, helping offset losing out on the Crossrail franchise. And it is still in the running for the Scotrail franchise.

It also highlighted its successful bid for a bus contract in Bahrain, and further rail franchise opportunites in Germany.

National Express, which operates an exact fare policy on its buses, is also rolling out smartcards, and will very shortly accept travelcards in a phased introduction which will ultimately see pay-as-you-go next year.

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