National Express happy to be a ‘boring’ company after rail exit

THE chief executive National Express, once the country’s biggest train operator, has emphatically ruled out a return to the UK rail sector.

Speaking as the transport giant posted record first-half profits, Dean Finch said National Express was determined “not to make huge risks” and was happy to be a “boring” company.

National Express exited its final UK rail contract in January 2017, selling the C2C East Anglian franchise to Italian company Trenitalia.

Mr Finch told The Daily Telegraph: “I would hope that if I said to my board I want to go back into UK rail, they would take me outside and shoot me.”

The comments came as a spotlight is being shone on the financial viability of operating in Britain’s rail sector. Last month the East Coast main line was renationalised when Stagecoach handed the network back to the Government early after racking up losses of £200m. Critics have argued the current procurement process perpetuates a growing trend for state-backed overseas companies to win franchises.

National Express yesterday rewarded shareholders with a 10pc dividend rise after its statutory profit before tax rose 24pc to £80.1m for the six months to June. Normalised profit before tax was £100.7m, some 3.2pc higher, and slightly ahead of City expectations.

The company is the second-largest school bus operator in the US. Its North American arm generated operating profit of $76.6m (£58.1m), 8.7pc higher than 2017. Spanish subsidiary ALSA posted a 7.5pc rise in operating profits to €48.6m (£43.2), while UK operations – where it delivers coach and bus services – grew operating profits by 8.5pc on an underlying basis to £31.6m.

Mr Finch said profits were previously spread equally across the National Express’s three main divisions. While the mix is now tilted more towards US and Spain, he said the company was “still a well-diversified business”.

“No one contract in the business accounts for more than 4pc of revenue. That’s a strength.

“Yes, stuff will go wrong, does. That’s life.”

He continued: “We try not to make huge risks … [And] we are not seeking transformational growth. We are a steady-as-she-goes, boring company that has been consistently growing its profits over the last four or five years.”

Analysts were impressed by an increase in full-year cash flow guidance to between £160m and £170m – an extra £20m compared with expectations.

Liberum analyst Gerald Khoo said National Express’s growth “was driven by the top line” and agreed with Mr Finch’s assessment that the company benefits from a “diverse international footprint”.

Alex Paterson, of Investec, said profits were £3m ahead of his expectation. The outperformance came from UK bus and coach operations with a £3.4m profit boost from property disposals.

National Express shares closed up 5.6pc at 421p. it always