National Express second quarter revenue accelerates

National Express posted growth at constant currency across all of its divisions in the second quarter and registered an increase in operating profits.

In the three months to the end of September, the transport operator said group revenue grew 3% year-on-year, while like-for-like profit climbed 7%.

The FTSE 250 group added its rail business performed particularly well in the period and exceeded the company’s forecast, as revenue in the segment grew 10% year-on-year, while the number of passengers carried rose 5%.

National Express’ UK bus segment posted a 2% increase in commercial revenue, while the group’s coach business carried a record number of passengers in July, driving core revenue up 3.5%.

In North America, the London-listed group secured a contract retention rate of 99%, which translated in year-on-year growth in the business.

"I am delighted that our focus on operational excellence and delivering for our customers is being recognised in our results, our success in new markets and the many awards we have recently won," said group chief executive Dean Finch.

Meanwhile, in the three months to September, the group secured three US transit contracts, started operating in Morocco and will soon begin its first rail service in Germany and was chosen as the preferred bidder for a bus service contract in Portugal.

“We continue to be impressed by the ‘slow’ build-up of contracts in German Rail,” said analysts at Shore Capital.

“The large number of smaller contracts and the typically larger length of these contracts does mean that on three-five year view National Express could built up a strong and robust portfolio of contracts within its German Rail business.”

Closer to home, National Express unveiled plans to bid for the East Anglia franchise and has been shortlisted for the Manchester Metrolink contract, with submissions expected to be completed next year.

National Express shares were down 0.07% at 284.80p at 0821 GMT on Thursday.