National Express sees improving performance as restrictions ease

© Reuters.

By Samuel Indyk – National Express , the rail and coach service provider, has today announced that the trend of improving performance is continuing despite ongoing Covid-related restrictions with April revenue up 50% YoY.

For the period from 1st January to 30th April, National Express (LON:) said revenue was down 16% but 2020 saw two and half months of life without travel restrictions.

Despite some restrictions on travel remaining, in the UK and abroad, the company anticipates first half performance to be at least in line with that delivered in the second half of 2020.

“I am pleased to see the continued improving performance trajectory across our business in the first four months of 2021 despite the ongoing lockdown restrictions,” said Group CEO Ignacio Garat. “It is very encouraging to see the positive impact on profit delivery of the management actions taken last year.”

Although the company appeared relatively upbeat its in trading update, National Express still faces hurdles to return to levels seen prior to the pandemic, according to Hargreaves Lansdown (LON:) senior investment and markets analyst Susannah Streeter.

“National Express is clearly edging along the road to recovery, but social distancing rules means the company can’t accelerate back to pre-pandemic levels,” Streeter said.

“It’s able to sell less than half the normal seating capacity, and is still running just a fraction of the coach services it used to cover. That means passenger numbers for its UK coach business are still just 8% of 2019 levels.”

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Going forward, Streeter thinks some of the longer-term changes brought on by the pandemic could also impact future performance.

“The working from home revolution and adoption of e-learning, is still likely to be a drag on revenues going forward, with commuters likely to travel less in the future,” Streeter added.

“The company says it expects pent up demand for travel to be unleashed once social distancing restrictions ease, but it’s far from clear when passenger numbers will return to pre-pandemic levels, so keeping a tight rein on costs is likely to stay a priority.”

At 13:40BST, shares in National Express were trading higher by 0.5% at 300.0 pence per share.

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