Arriva boosted by rail growth

Aug 22 2008 WalesOnline

Transport group Arriva today said half-year profits rose 40% after the addition of CrossCountry services boosted its UK trains division.

The Sunderland-based firm, which runs more than 16,000 buses and trains across the UK and Europe, said operating profits for the UK rail arm jumped to £14.8 million from £1.1 million a year earlier.

Revenues from the division surged after it took on the CrossCountry franchise - the most extensive in the UK, stretching from Aberdeen to Penzance – and saw passenger revenues on the service improve 10% year-on-year.

Overall, group revenues were 59% higher at £1.44 billion, with profits up to £66.3 million from £47.3 million a year earlier.

Arriva warned higher fuel prices and the economic downturn presented challenges, but said its fuel costs this year were "substantially fixed" with two-thirds of the requirement for 2009 also secured in advance.

The company’s UK bus division increased operating profits by 20% to £45.5million, based on a 14% rise in revenues to £454.5 million.

Arriva said "encouraging" passenger growth reflected marketing initiatives and the wider take-up of concessionary travel. It added that more than 460 new vehicles will enter service on its regional bus network during this year.

The company’s Arriva Trains Wales operation also contributed to the improved performance of the UK rail division. Arriva said 92.9% of the trains on the franchise arrived at their destination within five minutes of schedule in the six months of June 30.

The group hit passengers with a 4.8% increase in peak fares at the start of the year, with off-peak tickets rising by an average 7% – well above the rail industry average of 5.4%.

In mainland Europe, Arriva generated revenues of £626 million and saw operating profits increase by 24% to £34.9 million. The improvement reflected new contracts and the increase in the value of the euro.

Arriva is one of the largest European transport companies with operations across 10 countries and around 40,000 employees.

Chief executive David Martin said: "Our focus on Europe’s diverse transport markets gives us resilience and great potential for further growth."