TIDMNEX
RNS Number : 2797Y
National Express Group PLC
12 May 2021
National Express Group PLC
Trading Update
12 May 2021
National Express Group PLC ("National Express" or "the Group")
today reports its Trading Update for the period 1 January 2021 to
30 April 2021 ("the period").
Overview
-- The trend of improving performance is continuing despite
ongoing Covid-related restrictions. April revenue is up by around
50% compared to last year.
-- Despite revenue for the period being 16% below last year
(with two and a half months of 2020 largely unaffected by Covid
restrictions) operating profit is ahead of last year driven by the
actions taken to reduce costs.
-- We continue to generate positive EBITDA, slightly ahead of
our base case, with positive underlying operating profit delivered
in March and April, strongly ahead of last year.
-- We retain significant liquidity and expect to close the first
half of 2021 with around GBP0.9 billion in cash and undrawn
committed facilities after repaying the CCFF and short-term
facilities as planned.
-- Given the ongoing restrictions on travel, we continue to
anticipate first half performance to be at least in line with that
delivered in the second half of 2020. In our base case scenario, we
continue to project a robust improvement in the second half of the
year as vaccination programmes enable more restrictions to be
lifted.
Ignacio Garat, Group Chief Executive, said:
"I am pleased to see the continued improving performance
trajectory across our business in the first four months of 2021
despite the ongoing lockdown restrictions. It is very encouraging
to see the positive impact on profit delivery of the management
actions taken last year.
I remain grateful for the tireless work and commitment of our
colleagues, and for the ongoing support we continue to receive from
both customers and authorities, once again demonstrating the
strength of the relationships we have built over the years.
Progress has been made on a number of the 'big deltas' outlined at
the full year results presentation including the mobilisation of
new fleet in Casablanca and the launch of new standard operating
procedures in North America School Bus, already delivering
financial benefits as part of our 'Driving Excellence'
programme.
Whilst we remain focused on managing what we can control, we
remain confident that as restrictions across the world are lifted
we will see a strong recovery in demand for our services."
Divisional operating highlights
ALSA
-- Despite continuing lockdown restrictions, ALSA secured
revenue at around 75% of 2019 levels in the period.
-- Our, revenue-protected, Spanish urban operations continue to
operate a full service with patronage at around two thirds of
pre-Covid levels.
-- Inter-regional travel restrictions continue to impact demand
for our long haul services where we are running around a quarter of
the service operated in the first four months of 2019, with
passenger numbers at around 27%.
-- In Morocco, passenger numbers are up overall by over 60%
compared to pre-Covid levels driven by the expansion of Rabat and
Casablanca.
o In Casablanca we have started services on 10 new routes with
the delivery of 400 new buses, and a further 300 to be delivered
later in the year.
North America
-- We are currently operating services on around 90% of our
school bus routes, through full 'traditional' or 'hybrid' (a mix of
in-school and at home learning) arrangements.
o Working closely with customers, we have secured around three
quarters of our pre-Covid school bus revenue and continue to flex
staffing levels as required
o With the 2021/22 school bidding season almost complete, we
have secured rate increases of 3.5% on contracts up for renewal,
resulting in a 2.9% increase across the whole portfolio, with a 95%
retention rate.
o This compares favourably to the latest realised levels of wage
inflation, however following the extension to September of the
enhanced unemployment benefits programme, we are budgeting for an
increase in the cost of driver recruitment at the start of the new
school year.
-- In our Transit business we are seeing an increasing demand
for services which are now running at more than 75% of pre-Covid
levels securing around 80% of pre-Covid revenue.
-- In our Shuttle business, our strong customer relationships
continue to underpin revenue of around 75% of pre-Covid levels,
with 27% of services running.
-- Our 'Driving Excellence' programme is already delivering
financial benefits with record levels of on-time performance being
delivered consistently across our school bus portfolio.
UK
-- Our UK Bus business continues to run a full service with
patronage over 60% of pre-Covid levels. We continue to benefit from
government support, underwriting the cost of operating a
socially-distanced service.
o We welcome the National Bus Strategy and the proposals for
operators to work in partnership with local authorities, an
approach that has worked very well for many years in the West
Midlands.
o The launch of the Birmingham Clean Air Zone on 1(st) June
along with further bus priority measures will help to drive modal
shift, reducing congestion, improving air quality and growing
passenger volumes.
-- Having temporarily mothballed our UK coach network due to
England's third lockdown, we have reopened and are currently
running 13% of pre-Covid mileage with occupancy rates of around 85%
of available seats translating into 8% of 2019 passenger
numbers.
o Social distancing restrictions remain the key determinant of
occupancy levels, with less than half the normal seating capacity
available to sell. Once social distancing restrictions are removed,
we expect occupancy rates to rise given the pent-up demand for
travel.
-- Our NETS business has seen a surge in advance holiday
bookings for travel after June, with bookings in March 2021
performing ahead of pre-Covid levels.
o We have secured a number of new contract wins including
shuttle services for the Wimbledon Tennis and Open Golf
Championships.
-- Our NEAT business continues to expand, winning a new demand
responsive contract for Warwick University.
Enquiries
National Express Group PLC
Chris Davies, Chief Financial Officer 0121 460 8655
Louise Richardson, Head of Investor Relations 07827 807766
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Maitland/AMO
Neil Bennett 020 7379 5151
James McFarlane 07584 142 665
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About National Express
National Express is a leading mass transit provider with bus,
coach and rail services in the UK, North America, continental
Europe, North Africa, and the Middle East.
Notes
Legal Entity Identifier: 213800A8IQEMY8PA5X34
Forward looking statements and other important information
This document contains forward-looking statements with respect
to the financial condition, results and business of National
Express Group PLC. By their nature, forward-looking statements
involve risk and uncertainty and there may be subsequent variations
to estimates. National Express Group PLC's actual future results
may differ materially from the results expressed or implied in
these forward-looking statements. Unless otherwise required by
applicable law, regulation or accounting standard, National Express
does not undertake to update or revise any forward-looking
statements, whether as a result of new information, future
developments or otherwise. Forward-looking statements can be made
in writing but also may be made verbally by members of the
management of the Group (including without limitation, during
management presentations to financial analysts) in connection with
this document.
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