NATIONAL Express yesterday reported a fall in annual profits after one of the most difficult years in the 40-year history of its coach arm.
The largest operator of coach services in the UK was impacted by the withdrawal of the Government’s £16m senior citizen concession scheme, which meant one million fewer subsidised journeys last year.
Despite success in growing its non-concession passenger volumes by 5 per cent, National Express admitted it had over-estimated its ability to mitigate the loss of the senior citizen funding, leading to a £14.3m fall in the division’s operating profit to £20.6m last year.
The group, which is the biggest bus operator in the West Midlands and runs 20,000 school buses across 32 US states, reported overall pre-tax profits of £164.1m, down from £180.2m in 2011.
Chief executive Dean Finch said he was optimistic despite the decline, with four out of five of the company’s divisions showing growth last year and its rail arm recently celebrating the award of two German commuter franchises.
The defeat of incumbent Deutsche Bahn in the race to land the contracts in Cologne and Bonn marked another step in the recovery in fortunes for the rail arm, which was stripped of the East Coast mainline franchise in 2009. East Coast runs trains from London to Yorkshire, the North East and Scotland.
Operating profits in rail fell to £26.7m from £43.4m after its East Anglia franchise came to an end in February last year. Bus revenues grew by 2 per cent to £269m last year. Operating profits for the division rose 4 per cent to £34.1m.