Transport business National Express (NEX) has enjoyed a record start to its financial year. Statutory profit jumped by nearly a quarter to £80.1m – the biggest profit increase ever recorded by the group over a half-year period. This was largely the result of an 8.7 per cent increase in North American operating profits to $76.6m (£58.3m), helped by the completion of four acquisitions. Chief financial officer Chris Davies confirmed that further consolidation opportunities are a possibility in the second half too.
But high employment rates across North America mean the group will have to pay bus drivers more to discourage them from seeking alternative work. In the meantime, contracts up for bid or renewal have secured an average rate increase of 6.6 per cent, or 3.7 per cent across the entire portfolio, compared to a 3.7 per cent increase this time last year.
ALSA, the group’s Spanish and Moroccan business, also recorded a record profit performance of €48.6m (£43.1m) - a 7.5 per cent increase on the year before - in part the result of three acquisitions during the period. Operating profit in the UK improved by more than a fifth to £31.6m, boosted by property transactions in Dundee and London. But strip this out, and underlying profit growth moderated to 8.5 per cent.
Analysts at Liberum expect pre-tax profit of £217.8m during 2018 giving EPS of 32.5p, compared to £200m and 29.1p in FY2018.
| NATIONAL EXPRESS (NEX) | ||||
| ORD PRICE: | 408.6p | MARKET VALUE: | £ 2.09bn | |
| TOUCH: | 408.2-408.6p | 12-MONTH HIGH: | 425p | LOW: 337p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 230p* | NET DEBT: | 77% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 1.17 | 64.6 | 10.90 | 4.3 |
| 2018 | 1.21 | 80.1 | 12.10 | 4.7 |
| % change | +3 | +24 | +11 | +10 |
| Ex-div: | 30 Aug | |||
| Payment: | 21 Sep | |||
| *Oncludes £1.71bn of intangible assets or 335p per share | ||||
