National Express profits driven down by fuel costs

Transport group National Express has suffered a drop in first-half profits as it was hit by rising fuel prices and the end of its East Anglia rail franchise.

The bus and train operator, which last month recruited former ScotRail boss Mary Grant as managing director of business development, said pre-tax profits for the six months to 30 June fell to £71.8 million, down from £82m a year earlier.

Group revenues edged up 2 per cent to £956.7m, but more than £15m in costs due to fuel price inflation meant operating margins fell at every part of the business except its UK coach operations.

Despite the fall in profits, shareholders will receive an interim dividend of 3.25p a share, an increase of 3 per cent over last year’s payout.

Chief executive Dean Finch said: “We have had to address some significant headwinds in our existing markets while continuing to build a strong pipeline of new business opportunities.

“We are determined to make further progress on our debt reduction target and are pleased by our excellent cash generation. Our focus remains on delivering both excellent services for our customers and returns for our shareholders in the months and years to come.”