An 80 per cent slump in passenger numbers during lockdown and the expense of responding to the coronavirus pushed National Express (NEX) into a half-year loss. The transport operator, which, like its peers, is in receipt of government support, doesn’t expect revenues to fully recover this year or next, and has set about slashing costs and strengthening its balance sheet through a £230m placing over the period.
National Express racked up £63.5m in Covid-related costs during the half, which included protective equipment, cancellations and asset write-downs. This was partially offset by the revaluation of a put option relating to its 2019 acquisition of shuttle service provider WeDriveU. National Express issued put options to its seller last year, and the pandemic has prompted the revision of its expectations for WeDriveU’s earnings potential, benefitting the operator to the tune of £34.5m.
The group also swung to a free cash outflow of £193m, which was driven by a substantial adverse working capital movement. Its aggregate pension deficit, meanwhile, ballooned to £135m from £90m at the end of 2019.
Consensus estimates predict full-year 2020 losses per share of 1.6p, rising to earnings per share of 20p in 2021.
| NATIONAL EXPRESS (NEX) | ||||
| ORD PRICE: | 155p | MARKET VALUE: | £ 952m | |
| TOUCH: | 154-155p | 12-MONTH HIGH: | 485p | LOW: 66p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 201p* | NET DEBT: | 105% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 1.33 | 88.4 | 13.1 | 5.16 |
| 2020 | 1.03 | -122 | -17.3 | nil |
| % change | -23 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £2bn, or 329p a share | ||||
