Cost cutting drives National Express profit growth in first quarter
Cost cutting helped coach operator National Express secure profit growth in the first quarter despite fewer journeys being taken during the pandemic.
The travel company said performance is improving despite ongoing Covid restrictions, with April revenue up 50 per cent compared to last year, at the height of the first lockdown.
Revenue is 16 per cent below last year, but operating profit has beaten 2020 levels “driven by the actions taken to reduce costs”.
Performance in the first half of the year is expected to be in line with the final six months of last year, National Express said.
However the firm anticipates that the second half of the year will see “robust improvement” as vaccination programmes allow more restrictions to be lifted.
“Given the restrictions, the fact underlying operating profit has edged up is a testament to the tight purse strings at the group, with cost cutting measures bearing fruit,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
She added: “National Express is clearly edging along the road to recovery, but social distancing rules means the company can’t accelerate back to pre-pandemic levels. It’s able to sell less than half the normal seating capacity, and is still running just a fraction of the coach services it used to cover.
“That means passenger numbers for its UK coach business are still just 8 per cent of 2019 levels. On bus routes it’s better, with customer numbers coming in at 60 per cent of pre-pandemic levels with government support helping to make up some of the revenue shortfall.”