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National Express on the right track

"I am delighted to report another record set of results, primarily driven by organic revenue, profit and margin growth in every division," said group chief executive officer, Dean Finch.

National Express coach
The road to growth

Bus and trains operator National Express Group PLC (LON:NEX) saw its shares rise 3% as it said it is currently trading ahead of expectations.

The group said it was ahead of schedule – unlike most of the trains running in the south of England today – despite the impact of unprecedented bad weather in North America.

READ National Express enjoys growth across all divisions

Group revenue from continuing operations in the first half of 2019 rose 10.5% (or 7.8% on a constant currency basis) to £1.34bn from £1.21bn the year before.

All divisions in the group saw organic revenue growth and an improvement in operating margins; the group operating margin rose by six-tenths of a percentage point to 10.4%.

What the group calls “normalised” profit before tax improved by 13.8% to £114.6mln from £100.7mln, and was up by 10.7% when adjusted to take into account currency fluctuations.

The normalised figures in the trading update strip out intangible amortisation for acquired businesses and profit from discontinued operations in the previous year.

Reported profit before tax was up 10.4% to £88.4mln from £80.1mln.

The interim dividend was hiked by 10% to 5.16p from 4.69p.

"Our disciplined diversification means we have a portfolio of businesses that enable global best-practice and efficiency to be shared while allowing local growth opportunities to be pursued. Our strong cash generation continues to allow investment in new technology and strategic acquisitions to drive organic growth and new market expansion,” said Dean Finch, the chief executive officer of National Express.

Free cash flow improved by £10.2mln to £95.6mln from £85.2mln in the same period of 2018. Net debt widened to £1.28bn from £922.1mln a year earlier.

"The prospects for growth are strong. We continue to drive improvements in our core bus and coach businesses, add significant new contracts like Rabat and expand in newer markets such as Switzerland and US shuttle, through our recent WeDriveU acquisition,” Finch said.

“With many opportunities to pursue, we are confident of our future prospects,” he concluded.

Quick facts: National Express

Price: 455 GBX

LSE:NEX
Market: LSE
Market Cap: £2.33 billion
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