National Express profit accelerates in first half

Public transport operator National Express said its pre-tax profit for the first half of the year increased, while revenue also edged higher.

In a statement released on Wednesday, the group said its pre-tax profit for the six months to 30 June more than doubled to £54.3m, driven higher by one-off charges it booked in 2014 and did not recur.

Revenue ticked 2% higher year-on-year to £960.2m thanks to steady growth across the board and the FTSE 250 group said the results were in line its expectations.

National Express added it was making steady progress in securing new commercial deals and that it was on track to generate £100 of free cash for the year.

"We have made a strong start to 2015 and are on track to deliver the board's expectations for the year,” said group chief executive Dean Finch.

“We are focused on driving best value for our customers, employees and shareholders and are passionately committed to the communities we serve.”

National Express said it will pay an interim dividend of 3.68p, a 9% increase from the corresponding period a year ago.

Despite the positive results, analysts at Nomura reiterated their ‘reduce’ rating on the stock, citing uncertainty over the group’s expansion prospects.

“Although first half trading was in line and represented a solid margin expansion we remain unconvinced by the prospects for attractive Spanish upside or the potential returns from an acceleration in US School Bus investment,” they said in a note.

“On unchanged numbers, we therefore retain our 260p target price and ‘reduce’ rating.”

National Express shares were up 0.23% to 302.40p at 1039 BST on Wednesday.