National Express makes 'strong start' to 2016

The FTSE 250 firm said that during the period, total revenue was up 11% on a constant currency basis, which included the benefit of acquisitions and the start of German rail operations in December.

After adjusting for the new operations, revenue was up 4% on an underlying basis.

National Express said all divisions achieved an increase in revenue, supported by total underlying passenger growth across the group of 3%.

Its board said the company remained on target to deliver profit expectations and free cash flow and leverage targets for the year, of £100m and 2.0-2.5x EBITDA respectively.

"I am pleased that we have carried our strong momentum from 2015 into the first third of this year, achieving growth in passenger numbers and an increase in revenues across all divisions,” said National Express group chief executive Dean Finch.

“Our established businesses continue to grow, year-on-year, and our new businesses in Germany and Bahrain are already carrying millions of passengers, through a combination of innovation, partnership and customer service, underpinned by a relentless focus on operational excellence.”

Finch said he also believes the experience helps position the company well for other emerging opportunities.

"It is these successes that convince us that our strategy of diversification into new markets in a measured way, when the conditions are right, remains the right one,” Finch said.

“We are building a business with a balanced risk profile and limited exposure to individual contracts.”

He said that in North America, more than 90% of revenue comes from contracts it has held on average for more than ten years.

Where the company wishes to retain those contracts, it has consistently secured a success rate of 95%.

“We will also continue to seek out long-term and capex-light opportunities which meet our strict financial criteria. We remain on track to meet our full year profit and cash flow expectations."