National Express PLC (LON:NEX) said it had traded slightly better than its expectation that revenues to end-August would be around 50% of pre-COVID-19 levels.
Tight cost controls have also meant an underlying profit (EBITDA) and positive cashflow for the period said the bus operator, which said it had also picked up new contracts in Portugal and the US.
"This robust revenue collection and on-going tight cost control is underpinning positive EBITDA and cash flow projections. We are encouraged to see continued passenger growth across the group,” said Chris Davies, interim chief executive.
Broker Peel Hunt added that in North America, services on 65% of school bus routes are being operated and agreements are in place to secure nearly 70% of pre-Covid-19 revenue. The UK has seen a recovery in passenger volumes to 61% of pre-Covid-19 levels.
Buy with a 285p target price is the broker’s view, which adds that with any sort of normalisation of demand in the future National Express is undervalued.
Shares rose 5% to 131.6p.