East Anglia: Profits up at National Express
PUBLIC transport group National Express today geared up for its looming showdown with a rebel shareholder by posting a 30% leap in quarterly profits.
The bus, coach and rail operator, which is to lose its East Anglia rail franchise having failed to make the shortlist for a new contract due to start next year, said the performance for the three months to March 31, which also included a 5% rise in revenues, supported its current strategy in the face of a campaign by US-based Elliott Advisors for radical change.
The matter will come to a head next Tuesday when the American hedge fund, which owns around 17.5% of National Express (NX), will ask fellow shareholders to back the election of three new non-executive directors.
Elliott says the appointments will re-invigorate the NX board and hopes to garner support for a shift in the company’s strategy. Possible options could see the group tie-up with another UK rival such as Stagecoach or sell-off part of the business and re-focus on the United States.
However, NX chief executive Dean Finch said today’s update demonstrated that the group’s strategy was “sound and will deliver significant shareholder value over the long-term”.
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In the update, NX said its coach business had seen a 3% increase in sales, including 6% growth in its core express network.
Its bus services saw revenues rise 4% despite a decline in passenger numbers following price rises, while revenues at its rail business, which also includes south Essex commuter route c2c, were 8% higher.
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