After strike threats and widespread condemnation over ongoing travel chaos, Network Rail is continuing its annus horribilis with a set of pretty dismal results.
Network Rail's pre-tax profits halved for the year to March 31, from £1.-4bn to £506m, while opreating profit fell 13.3 per cent to £1.74bn.
Revenues also slipped by 3.8 per cent to £6.09bn.
Employee costs rose marginally from £1.91bn to £1.92bn over the 12 months.
Why it's interesting:
Network Rail said some of the decline in profits was down to investment in the country's rail infrastructure – a record £3.4bn went into expansion and improvement, double that of five years ago.
But it also acknowledged that falling income – which has occurred despite passenger numbers rising to a record high “in modern times” of 1.65bn people over the year - had hurt its bottom line.
What they said:
The company said in a statement:
Network Rail is a not for dividend company and so does not have shareholders to take a share of the surplus. Any surplus, like Transport for London, are reinvested in the railway to replace worn out assets.The lower surplus reported today reflects a decision by our regulator that we require a smaller margin to manage our business in our new five year funding period, CP5, which started 1 April 2014. In 2014/15 our income was £246m lower than last year as a result and this is reflected in our operating surplus.
Patrick Butcher, finance director, added: "The railways continue to grow in popularity and we continue to invest heavily to respond to that demand. While progress is being made in improving performance, safety, asset reliability and delivering more renewals and projects, our rate of acceleration in these areas isn’t yet where we want it to be.
“With more than a million more trains on the network than 10 years ago, there are inevitable challenges. We are determined to do more to improve and action is being taken to quicken the pace of change.”
Network Rail better be quicker than some of its trains if it is going to keep up with those challenges. Still, its Twitter feed had a rare happy announcement to make this morning, so perhaps things are looking up.