The company might be perceived as quintessentially British, but bus and rail group National Express (NEX) actually earns roughly two-thirds of its crust overseas. Recent acquisitions mean it now has wheels on the ground in Germany as well as more in Spain and the important US market. These deals helped group revenues rise 10.4 per cent to £1.1bn on a constant currency basis.
The rail division delivered the biggest increase in revenue, up 40 per cent to £115m thanks to the first contribution from the aforementioned German deal. But the division suffered a small operating loss due to contract bid costs and a £4.1m increase in the charge the UK government levies on the company to run its domestic franchises.
In North America, the largest contributor to group revenues, sales were boosted by bolt-on acquisitions, as well as good execution of its 'up or out' strategy, meaning the group won't renew a contract unless an overall increase to its value is agreed. Group finance director Matthew Ashley said this was important because the buoyant US economy meant wages were rising, thus it had to pay drivers more to retain them.
Analysts at Liberum expect adjusted pre-tax profits of £164m and EPS of 25.2p in the year to December 2016, up from £150m and 23.4p for FY2015.
| NATIONAL EXPRESS (NEX) | ||||
|---|---|---|---|---|
| ORD PRICE: | 338.7p | MARKET VALUE: | £1.73bn | |
| TOUCH: | 339.1-339.5p | 12-MONTH HIGH: | 353p | LOW: 255p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 198p* | NET DEBT: | 78% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 0.96 | 54.3 | 8.50 | 3.69 |
| 2016 | 1.10 | 56.9 | 9.20 | 3.87 |
| % change | +14 | +5 | +8 | +5 |
Ex-div: 1 Sep Payment: 23 Sep *Includes intangible assets of £1.41bn, or 275p a share | ||||
