National Express (NEX) accompanied its latest results announcement with a series of environmental pledges. The group will not buy another diesel bus in the UK, is targeting a fully zero-emission bus and coach fleet by 2035, and is including environmental targets in all senior executive share schemes. Welcome news on the environmental front, but one wonders what these measures mean for the group’s operations outside the UK, which contributed a touch over 78 per cent of its revenues in 2019.
The group had a record performance for sales and profit in 2019, with free cash flow coming in ahead of management’s expectations at £179m, albeit down almost £20m on 2018 due to higher spending on maintenance, capital expenditure and working capital commitments. Passenger numbers were up 5.1 per cent across the group year on year.
National Express achieved organic profit growth in all of its divisions, with the retention and expansion of its two largest contracts, namely Boston and Chicago, supplemented by nine acquisitions in the year including WeDriveU, a Silicon Valley-based employee shuttle business. Management expects to continue its acquisitions into the current year.
Peel Hunt is forecasting adjusted pre-tax profits of £251m this year, and EPS of 37p, rising to £271m and 40.6p in 2021.
| NATIONAL EXPRESS (NEX) | ||||
| ORD PRICE: | 403p | MARKET VALUE: | £2.06bn | |
| TOUCH: | 402-403p | 12-MONTH HIGH: | 485p | LOW: 385p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 210p* | NET DEBT**: | 112% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 1.75 | 123 | 20.9 | 11.30 |
| 2016 | 2.09 | 135 | 23.0 | 12.30 |
| 2017 | 2.32 | 156 | 25.7 | 13.50 |
| 2018 | 2.45 | 178 | 26.6 | 14.86 |
| 2019 | 2.74 | 187 | 27.6 | 16.35 |
| % change | +12 | +5 | +4 | +10 |
| Ex-div: | 23 Apr | |||
| Payment: | 12 May | |||
| *Includes intangible assets of £1.9bn, or 372p a share **Includes lease liabilities of £213m | ||||
