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National Express hikes dividend after record year of profits

For 2019, National Express expects another year of organic revenue and profit growth

National express
The train and bus operator achieved organic revenue growth across all divisions

Train and bus operator National Express Group PLC (LON:NEX) hiked its full-year dividend by 10% after delivering record profit on the back of higher revenue and international expansion.

Profit before tax at continuing operations rose by 10% to £220mln last year as revenue gained 5.6% to £2.5bn, boosted by 11 acquisitions including seven in North America, three in Spain and one in the UK.

READ: National Express pre-tax profit up 18% after strong summer in the UK

At constant exchange rates, pre-tax profit increased by 11.3% and revenue rose by 6.9%.

Underlying growth across all divisions 

North America revenue increased by 4.2% to £1.1bn, UK revenue edged up 2.7% to £577mln and the Spanish ALSA business saw revenue grow 12.2% to £745.1mln.

At constant currency, North America grew 8%, ASLA increased 11.2% and the UK edged up 2.8%.

However, revenue in the German rail business fell by 14.1%, or 15.1% at constant currency, to £67.8mln as 2017 had the benefit of catch-up revenue that was not recognised in 2016.

On an underlying basis, the German rail revenue rose by 5.4%.

The company proposed a full year dividend of 14.85p, compared to 13.51p a year ago.

For 2019, the group expects another year of organic revenue and profit growth.

“While the political context, certainly in the UK, may be uncertain, we are determined to remain a consistent source of growth in shareholder value,” said chief executive Dean Finch. 

Liberum holds rating at 'buy'

Liberum maintained a 'buy' rating and target price of 470p.

"Strong growth as expected with management’s strategy of a diversified international portfolio delivering growth in all regions, underpinned by a mix of organic growth and acquisitions," it said. 

"We expect more of the same going forward, as the group continues to deliver steadily compounding growth.

"While consensus estimates seem unlikely to move materially for now, we see the balance of risks being on the upside."

Shares fell 1.1% to 418.60p in morning trading. 


-- Adds broker comment and share price -- 


Quick facts: National Express

Price: 448.2 GBX

Market: LSE
Market Cap: £22.94 m

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