Arriva hit by fall in rail profits
Mar 3 2010 By Graeme Evans
Across the group, which has a sizeable transport business in mainland Europe, pre-tax profits fell 19% to £121.7 million in 2009.
Chief executive David Martin said the company had come through a challenging year with ``resilient earnings'', helped by improved efficiency.
He added: "Trading is healthy in most mainland European countries, our UK bus business is showing continuing strength, and the acceleration of passenger revenue growth in our UK rail franchises is encouraging."
Mr Martin said the board’s confidence in prospects was demonstrated by a 5% increase in Arriva’s dividend for the year. Shares rose 4% today.
Investec Securities analyst Joe Thomas said the full-year results were in line with expectations, while recent trading appeared reasonable.
However he has a sell rating on the stock due to uncertainty about the impact of post-election spending cuts on the UK bus arm, while Mr Thomas also has continuing reservations about the performance of the European business.
Arriva recently revealed it was in talks with France’s national rail operator SNCF over a merger which could create a new £6 billion European giant.
The company said in January it had held "very preliminary" talks over a potential tie-up with "all or part" of Keolis, which is 44.5% owned by SNCF.
Keolis employs 40,000 staff with operations in Europe, Algeria, Australia and Canada. It has the largest bus and coach fleet in France, where Arriva currently has no presence.
