New boss vows to shake up National Express

Dean Finch, who joined as chief executive in February, said there was "considerable scope" to improve the bus business – which operates in the West Midlands and Dundee – as costs had grown ahead of revenues during the past five years.

He has also begun a "complete overhaul" of the US arm, which runs school buses, and will take direct "hands on" control of National Express's businesses in order to drive up performance.

The new boss joined National Express from London Underground infrastructure firm Tube Lines after a disastrous year for its rail business.

National Express returned its loss-making East Coast franchise in November after overbidding for the deal before recession struck. The company will also end its East Anglian and c2c commuter deals in 2011.

But Mr Finch praised the performance of the firm's Spanish and UK coach operations and said the group had made an "encouraging" start to the year.

"While we have much to do, National Express has a strong portfolio of first-class transport businesses and the ability to deliver to its full potential over the longer term," he said.

The detailed review of the UK bus business – which employs more than 5,000 people – found "several structural areas" for improvement, including "above average" wage costs and the need to boost margins.

National Express has also strengthened its US management team, and has also appointed procurement and commercial directors for the overall group.

Mr Finch wants to create a "flatter organisation" with clearer management accountability and responsibility.

The group added that revenues so far this year had stabilised – although trading conditions remained "relatively difficult" – with full-year profits in line with expectations.

The UK business was boosted by a return to profit for the rail division during the first quarter, thanks to higher passenger numbers at c2c. Its coach arm grew revenues by one per cent during the seasonally quieter period, with "promising" results over a busy Easter period.