NATIONAL Express showed further signs of rehabilitation yesterday as it posted a 38 per cent jump in adjusted annual profits to £160.5m.
Revenues fell 22 per cent to £2.13bn, however, after the firm gave up its loss-making East Coast rail franchise in November 2009.
National Express said it will pay a dividend of six pence per share, the first payment in two years.
Chief executive Dean Finch, who took the top job last February said: “This is a renewed company. Our much improved financial performance provides a platform to drive further growth, continue targeted investment and restore a dividend. With a clear focus on our strategy we are confident in the year ahead.”
The group, which cut net debt by seven per cent to £610.4m, said it was seeing good margin progression and revenue growth in 2011 so far and was confident on prospects for the balance of the year. The firm’s fuel use is fully-hedged for 2011 and 75 per cent hedged for 2012.
The number of passengers using National Express’s UK bus services fell four per cent in 2010, which the firm said reflected lower economic activity in the Midlands and Dundee, where most of its services operate.
The firm said the 20 per cent cut to the bus service operators grant announced by the government in October will cost it £4m a year once it kicks in during 2012.
National Express’s coach division saw broadly flat revenues of £250.3m as the firm consolidates its longer-haul services.
Rail revenues fell 46 per cent to £637.5m after the government took control of its East Coast franchise just over a year ago because the firm could not run the line profitably. Margins rose by 4.3 percentage points to 5.3 per cent thanks to cost control.
Panmure Gordon said the results were slightly ahead of forecasts, while analysts at RBS said the firm has made strong progress.
Shares in the FTSE 250-listed firm fell one per cent to 247p yesterday.