Today’s numbers from bus and coach operator National Express are very much in the rear-view mirror. Having hit engine trouble thanks to the pandemic it’s now all about how the business can get back on the road to profit and sustainable cash generation.
“The main speed bump for National Express is reluctance on the part of the public to get on public transport out of fear of the accompanying infection risks,” says AJ Bell’s Russ Mould.
“What could help is demand from a newly vaccinated older cohort making spring and summer holiday bookings with the group. Around 98% of its holiday customers are over 65s and it has seen a big surge in bookings.
“National Express has demonstrated its flexibility over the last 12 months, mothballing its coach services during periods of full lockdown before resuming operations when that has been possible.
“By reducing costs, it was able to generate positive free cash flow in the second half of the year and net debt reduced year-on-year, helped by the small matter of a big fundraise.
“The company also continues to win new contracts, although greater regulation on bus contracts is a risk facing the business particularly in markets like Spain.
“A longer-term driver for National Express is the need to get us out of our cars and into public transport if targets around global emissions are to be met.
“The business has begun to launch electric vehicles on its networks and this is likely to be an area of priority going forward as it looks to prove up its green credentials.”