Directors at bus group National Express expect to deliver accelerated growth in passenger revenue when they reveal the group’s annual results in the new year.
A pre-close trading update has revealed a continuing improvement in fortunes for the firm’s scheduled bus services in Dundee and the West Midlands, and disclosed how it anticipates an income boost of around 3% for the division during the 12 months to the end of December.
The likely hike follows the previous year’s 2% increase a performance which, allied to margin-boosting cost cutting measures including a 1% cut in fleet mileage resulted in operating profits rising 4% to £34.7 million before deductions.
“Like-for-like commercial revenue has improved throughout the year and is expected to be 3% higher overall in 2013,” the company said of its public transport arm.
“We continue to invest in new fleet, improved on-bus quality, technology to enhance operational efficiency, customer mobile information and the progressive roll out of commercial smartcards.”
National Express’ update revealed revenue growth across all of its businesses, which also include operations in coaching and rail, as well as in crisis-hit Spain, Morocco and the US school bus sector.
It came after the group’s Dundee arm was left relying on senior managers to drive buses earlier this week, as staff refused overtime in a protest over staffing, sackings and suspensions at the depot.
The company said revenues had grown “strongly” in its coach division, with steady improvements elsewhere.
Intercity travel was said be improving in Spain, with urban revenue flat on a like-for-like basis, and a 13% boost expected from growing networks in Morocco.
Capital spending has been targeted to strengthen returns in foreign markets, National Express said, while profit growth is being reinvested in the creation of new market opportunities.
Chief executive Dean Finch said overall trading continued to be “encouraging”, as the company seeks to better last year’s overall pre-tax return of £69m on revenues which ran to £1.83bn.
“We are focusing investment in those areas of the group where it makes the biggest impact to our customers and we are seeing increasing numbers of people choosing to travel with National Express, whether by coach, bus or rail,” he said.
The group, whose c2c service, which connects London with Essex, is the UK’s best performing for customer service and punctuality also hailed last month’s shortlisting for the ScotRail franchise.
It will see National Express submit three tenders for new rail deals inside the next four months, while also starting work on a bid for Berlin’s Ringbahn circular route.
The company said it was in the running for work worth up to £10bn in revenue, and would continue to bid for German rail and North American transit contracts.
Mark Manduca, of Bank of America Merrill Lynch, was one of a string of analysts to trill about the firm’s prospects.
“National Express is trading at a discount to the sector and to the market, with an attractive yield, international revenue growth opportunities, and a proven management team,” he wrote in a market note.
Shares closed the day up 1.80 at 264.50.