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National Express pulls out of German contract

National Express said that because of Deutsche Bahn’s objection, the introduction of new trains would have been delayed
picture of railway station
Passenger number rose handily

Bus and train group National Express PLC (LON:NEX) has pulled out of a major contract in Bavaria in Germany due to delays following a challenge by the incumbent operator.

National Express said that because of Deutsche Bahn’s objection, the introduction of new trains that were the basis of its successful bid to run the Nuremberg S-Bahn  would be substantially delayed and have led to prohibitive additional cost.

The train operator added it intends to bid for more German contracts and a first contribution from there helped third quarter operating profit rise by 9% with a particularly strong performance overseas, it said.

Year–to-date group revenues are up 17% on an actual currency basis and passenger numbers rose by 6%.

Rail revenue grew by 43% year to date and included its new Ruhr-based German rail operation. US revenues rose by 16% while UK bus and coach operation were flat at 2% and 1.7% respectively.

Group profit in the year so far was up by 12% on a reported basis and by 5% at constant currencies.

Dean Finch, chief executive, said: "With two thirds of our earnings generated outside of the UK this geographic diversity, combined with a focus on operational excellence and the deployment of technology, continues to deliver good growth, a strong cash flow and opens new market opportunities.

“The Group is on course to at least deliver its targets for profit, cash flow and gearing for the year.”

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