International business has helped transport operator National Express (NEX) to make up for a lacklustre period in the UK. Both the North American and Spanish and Moroccan (ALSA) divisions delivered record half-year normalised profits, with 8.2 per cent and 9.2 per cent increases at constant currency, respectively. North America benefited from recent acquisitions and a 95 per cent retention rate on contracts. Spanish long-haul services performed particularly strongly, while lower fares have helped to offset competition from taxis in Morocco.
Around 80 per cent of the group’s earnings now come from outside the UK, and management said the North American and Spanish and Moroccan divisions “more than offset challenging trading” domestically. Despite offering low fare zones in an attempt to make up for challenging market conditions, operating profit in the UK bus division fell to £16.6m from £16.8m. Terrorist attacks were also blamed for weak demand for UK coach services during the latter part of the period. The company sold its c2c franchise, the last of its rail operations, to Trenitalia earlier this year in an attempt to free up cash and reduce risk.
Analysts at Deutsche Bank expect pre-tax profit of £190m in the year to December 2017, with EPS of 29.6p, compared with £170m and 26.4p in FY2016.
| NATIONAL EXPRESS (NEX) | ||||
| ORD PRICE: | 374p | MARKET VALUE: | £1.91bn | |
| TOUCH: | 373.6-374p | 12-MONTH HIGH: | 389p | LOW: 330p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 211p* | NET DEBT: | 79% | |
| Half-year to 30 June | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 1.01 | 54.4 | 9.2 | 3.87 |
| 2017 | 1.17 | 64.6 | 10.9 | 4.26 |
| % change | +16 | +19 | +18 | +10 |
| Ex-div: | 31 Aug | |||
| Payment: | 22 Sep | |||
| *Includes intangible assets of £1.5bn, or 299p a share | ||||
