National Express Group PLC ("the Group") is publishing its interim management statement for the period 1 January 2008 to 30 April 2008, ahead of the Group's Annual General Meeting being held later today.
The Group has made a good start to the year and is trading in line with management expectations.
We continue to enjoy good revenue growth in Spain, which is in line with our expectations. In particular, we achieved the 5% revenue growth assumption set out in our acquisition business case for Continental Auto. The integration of the two businesses has progressed as planned and we will realise the targeted synergies. Our position as the number one private operator of public transport services in Spain leaves us well positioned for the expected further liberalisation of the Spanish transport market.
We are encouraged by the performance of the whole UK Division. The integration process announced in July 2007 is substantially complete, with the £11 million of annualised cost savings achieved. We are now seeing the benefit of having a single management team responsible for all activities in the UK, particularly in the areas of revenue and yield management.
Our trains business has continued to perform in line with expectations and we have continued to improve operational performance across all our train operating companies. We have achieved overall revenue growth of 9% in our trains business despite a softening of demand on Stansted Airport routes resulting from lower footfall through the airport.
At National Express East Coast ("NXEC") we have seen revenue growth of 11%. The NXEC franchise commenced in December 2007, and the launch process has proceeded as planned.
We have also relaunched our National Express East Anglia ("NXEA") franchise, driven by our desire to make a significant improvement in our customers' travel experience, as well as providing a platform for leveraging further value from our strong brand. As part of these improvements NXEA is taking a leading role in implementing the Department for Transport's plans for growth.
The bus business saw 6% revenue growth. In the West Midlands we are continuing to see passenger growth in excess of 10% on the Quality Partnership routes launched to date, and we are pleased that a further 44 routes were launched in Dudley last week under our Quality Partnership with Centro. Our regulated bus operations in London continue to perform well, achieving a 7% year-on-year increase in operated kilometres.
The National Express Coach network saw encouraging revenue growth of 5% despite the lower footfall at Stansted Airport. We expect our continued focus on providing excellent value fares to drive sales in the important summer months. Our plans to grow new revenue streams are proceeding well, particularly in the special events business.
Our North American school bus business continues to focus on the Business Transformation project which will deliver a step change improvement in the experience of school boards and parents. Testing of the new processes will start in the second half of 2008 and we are excited by the opportunities this project will deliver for us.
Revenue growth of 7% was driven by a combination of the 2007 bid season and organic route growth. This is in line with our expectations. The 2008 bid season is not yet complete but we are pleased with our performance to date.
Despite the current economic back drop, all operations have made a good start to the year and we have seen no adverse impact on trading in the first quarter. Our clear business strategy and our well balanced and diversified portfolio give us confidence in the Group's prospects. This confidence is demonstrated through our continued commitment to increase dividends by 10% for the next three years.
We have provided increased certainty over our fuel cost exposure by increasing the Group's fuel hedge position. We are currently 85% hedged for 2008 and 40% hedged for 2009.
The strengthening of the Euro against the Pound since 1 January 2008 has resulted in an increase in our reported net debt of around £70m. However, our financial position remains unchanged as our €540m facility provides security over adverse currency trends.
Barry Gibson will be stepping down from the Board in the near future. Barry will have served National Express as a Non Executive Director for over eight years having joined the Board in 1999. He is currently the Senior Independent Director and Chairman of the Remuneration Committee. The Board thank him for his outstanding contribution and wish him well for the future. We expect to announce the recruitment of a replacement Non Executive Director for Barry shortly.
National Express Group PLC is today publishing an interim management statement for the first quarter of 2008, covering events in the period from 1 January 2008 to 30 April 2008. The statement complies with the UK Listing Authority's Disclosure and Transparency Rules.
The revenue growth figures disclosed above are the like-for-like growth in revenue achieved when comparing the three months ended 31 March 2008 to the three months ended 31 March 2007. For acquisitions and train franchises, the like-for-like adjustment restates the 2007 results to assume ownership of the business in both periods. The Easter holidays occurred in the three months ended 31 March 2008 but not in the three months ended 31 March 2007, thus benefitting trading in 2008, and the like-for-like adjustments remove this benefit. Like-for-like revenue growth is assessed in local currency and so is not affected by changes in foreign exchange rates.
The interim results for the six months to 30 June 2008 will be announced on Thursday 31 July 2008.
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For further information, please contact:
National Express Group PLC
Richard Bowker, Chief Executive
Gareth Wright, Acting Group Finance Director +44 7795 267 453
Neil Bennett / Suzanne Bartch
+44 20 7379 5151