National Express' revenue rises due to overseas expansion

Transport operator National Express’ revenues jumped 14.4% to £1.1bn in the first half of the year, in line with expectations, due to expansion abroad.

The company reported a pre-tax profit increase of 4.8% to £56.9m in the six months ended 30 June, compared to the same period last year.

Earnings per share rose 10.8% to 11.30p. The interim dividend also rose by 5% to 3.87p.

Operating profit increased 7.4% to £96.2m and free cash flow was £66.1m. Net debt increased by 12% to £802.7m.

National Express’ diversified portfolio of cash generative businesses provided a source of revenue and profits, as two thirds of earnings were generated outside the UK and no one contract contributed more than 4% of its operating profit.

The company's German rail operations and recent acquisitions in North America and Spain contributed to the 10.4% increase in revenue in constant currency.

North America’s revenue grew 15% on a constant currency basis which reflected a bid season which produced an average price increase of nearly 4% across the portfolio and 7% price increase on contracts up for renewal.

There were record passenger numbers of over 153m journeys in Spain and Morocco, supporting revenue growth of 4% on a constant currency basis.

Rail with passengers grew 8%, which benefited from the introduction of a new timetable in December 2015, together with the first six months of the German rail operations.

Revenue, profit and margins grew in bus and coach operations in the UK.

The Bahrain bus operation carried over 1m passengers per month in only its second year of operations.

The FTSE 250 listed company said it remained on track to deliver its profit,free cash flow of £100m and gearing targets for the year.

Chief executive Dean Finch said: "We have made a good start to 2016 and despite subdued growth in the UK we remain on track to deliver our expectations for the year. The diversity of our cash generative, international portfolio of businesses where two thirds of our earnings are generated outside of the UK, is a key strength that allows us to grow and to declare a 5% increase in the interim dividend.

"Our strong cash generation provides us with options and we will continue to look to deploy capital in those parts of our business where we believe it will generate the best returns for shareholders...We will continue to seek attractive growth opportunities, including new markets, where we can draw on our international reputation for operational excellence and the successful mobilisation of new operations, to deliver further shareholder value."

Shares in National Express fell 0.24% to 338.20p at 0926 BST.