National Express has revealed its total revenues fell by almost a fifth last year as it suffered from the UK Government’s withdrawal of a concessionary travel scheme for elderly and disabled people.
The bus and coach giant, which runs local buses in Dundee and the West Midlands, said sales slid from £2.24 billion during 2011 to £1.83bn in the 12 months to the end of December, with improved margins and cost reduction measures failing to cushion the blow.
Pre-tax profits also fell at the group, from £180.2m last time out to £164.1m in 2012, as National Express claimed the fall was driven by the loss of a million passengers no longer entitled to reduced-cost long distance and inter-city transport in England and Wales.
Chief executive Dean Finch said he was “very pleased” with progress as a whole and the strong performance of “four or five” divisions.
“Our most significant challenge was the decline in National Express Coach’s elderly and disabled passengers by one million after the UK Government’s removal of its coach concession scheme,” he said.
“This made 2012 one of the most difficult years in National Express Coach’s 40-year history and has driven the decline in National Express Group operating profit.
“However, our recent contract wins in Spain and North America and selection by German authorities to run two rail contracts are an indication of the international strength of our business, something we are determined to build on in 2013.”
National Express’ coach business struggled with a 40% decline in revenue from over-60s using reduced-fare services.
Operating profit fell £14.3m in the division to £20.6m, but revenue slid only 2% to £259.1m.
By contrast, rail revenues fell more than 70% to £195.1m after the loss of the National Express East Anglia rail frachise in February. Profits slid by 39% to £26.7m.
Overall, the group said it had won contracts worth almost £2bn in forward revenue over the course of the last 12 months, and had grown non-rail profits marginally.
Year-end total dividend would rise by 3% to 9.75p, it added.
The company said its performance in Spain had been “resilient” in the face of a difficult year, with urban operations there and in Morocco performing strongly.
Last year was “particularly good” for North American operations.
UK Bus performed well, despite a reduction in fuel duty rebate, and the company said network reviews had led to growth in passenger demand.
The group also highlighted the strength of its c2c East Anglian rail service which it said carried 2m passengers as part of the “successful delivery” of the London Olympics.
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