Train company defies downturn and returns to trading in black

The train company, one of the UK’s few open access rail operators, said pre-tax profits in the year to the end of March 2011 hit £1.7m, compared with losses of £1.9m for the same period a year earlier.

Turnover increased three per cent to £21.7m, according to accounts recently lodged with Companies House.

The company, which is majority owned by First Group, operator of the TransPennine Express line, now runs a fleet of five trains after recently leasing another train. It runs seven direct services from Hull to London during weekdays.

The figures were an improvement on a year earlier, when it saw a four per cent fall in passengers revenues. However, Hull Trains said revenue growth tailed off towards the end of its financial year, and tough trading has continued.

“During that year the company started quite strongly but started to feel the impact of the recessionary effect in the East Yorkshire area as the year progressed,” said managing director Cath Bellamy.

“It had some horrendous weather last Christmas which impacted all transport operators. In February (2011) it had picked up to small numbers of positive growth, but the underlying trend in the area has been one of slowing down.”

Ms Bellamy said it has been an achievement this financial year to achieve numbers in line or slightly below last year’s. The company is still forecasting a profit this year.

She added many of Hull Trains’ business customers are trading down from first class to standard class, or cutting back on the number of journeys.

“The area has really struggled, particularly the public sector, with a large number of redundancies,” she said. “That has pressured us. But we’ve still managed to hold our own.”

The accounts show Hull Trains paid out dividends totalling £1m during the year.

The company recently told passengers it is increasing fares by an average of 4.5 per cent.

As well as the impact of the economic downturn, Hull Trains has also been hit by reliability issues with its class 180 trains and cable thefts on its line.

In June the company revealed it topped a rail customer satisfaction survey, coming joint first in the spring 2011 National Passenger Survey. Some 95 per cent of passengers said they were satisfied with the overall service, and increase on 93 per cent in autumn 2010.

But less than a month later Ms Bellamy was forced to apologise to customers after a spate of delayed and cancelled journeys.

She said the company responded by leasing an extra train from Grand Central, taking its fleet to five, to give it more spare capacity. Leasing firm Angel Trains is also upgrading the class 180 trains as part of a £4m-£5m programme, she added, which should be complete by early summer and fix many of the problems which have dogged the fleet.

Early last year Hull Trains also completed a £2m refurbishment of its trains, sprucing up their interiors and installing free WiFi internet for passengers.

“We’re in a better place than we were in the summer,” said Ms Bellamy, who joined the company in February 2011.

“We’ve got a little bit more spare capacity in our fleet so that if there are delays between Hull and London we’re not impacted like a domino effect.

“We’re also getting the full-year impact (of the refurbishment).”

Hull Trains also recently appointed a new head of operations, Keith Doughty, an industry veteran with 22 years’ experience on the railways.

Despite weaker demand, Ms Bellamy said the company has no plans to trim its capacity.

“We’ve no plans to scale back our services and what I would really like to do is grow the business,” she said.

“We’ve still got plenty of capacity on our trains.

“We are bracing ourselves for a tough year ahead so it’s stick with what we are doing.

“But it’s a good time to be in rail. I’ve been in the rail industry for nearly 20 years and I cannot remember a time when rail travel was cheaper than car travel.”

Hull Trains is 80 per cent owned by FirstGroup, while Renaissance Trains owns the remaining 20 per cent.

It competes with Cross Country and state-owned East Coast Main Line between Yorkshire and London, and employs about 100 staff.

Firm goes it alone without subsidies

First Hull Trains was founded in September 2000, offering a direct service between Hull and London Kings Cross.

In its first year the company carried about 80,000 passengers, and now carries more than 750,000 passengers annually.

It operates seven direct services between Hull and London on weekdays, with five each way on Saturdays and Sundays. As an open access rail operator, it does not receive Government subsidy.

It has a fleet of five Adelante class 180 diesel trains, capable of 125 mph.