National Express Says Progressing Strongly To FY22 Revenue View Of Around £2.7 Bln

National Express Group Plc. (NEX.L) Tuesday said that its revenue continues to track close to pre-pandemic 2019 levels, progressing strongly to anticipated fiscal 2022 revenue of around 2.7 billion pounds.

The company said ALSA revenue is recovering more strongly than expected earlier. It is already about 15 percent ahead of pre-pandemic levels driven by strong organic growth in Morocco and a faster-than-anticipated recovery in Spanish Long Haul.

UK revenue is performing in line with expectations. Bus patronage is currently at about 85 percent of pre pandemic levels and Coach recovery is faster than expected.

German Rail revenue is nearly four times pre-pandemic levels driven by the new contracts.

In North America, Shuttle revenue is above 90 percent of pre-pandemic levels. Transit is continuing to recover in line with expectations with volumes now at 82 percent. Meanwhile, School Bus continues to be challenging, with ongoing industry-wide driver shortages resulting in around 10 percent of contracted routes not being run currently.

Looking ahead, the company said that in the medium-term, it is confident in delivering at least 1 billion pounds of revenue growth from 2022 to 2027.

As per Capital Markets Day, the company expects an average profit margin of 9 percent in the period 2022 to 2027, and recovery to pre-pandemic margin levels of around 10 percent in the later stages of that period. This would result in significantly more than 100 million pounds of EBIT growth over the same period.

In the short-term, the company expects the recovery in profitability to lag revenue recovery, and hence for margins initially to be below target 2022-2027 average.

National Express continues to expect to deliver a sequential improvement in margins from 2021 levels, with a 2022 margin of around 7 percent.

Going forwards, the company expects 2023 margins to improve further on 2022 and towards its 9 percent target average margin, with further improvement thereafter towards pre-pandemic margin levels, consistent with previous guidance.

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