Arriva announces £116m pre-tax profit

Bus and train company Arriva today became the latest transport group to report rising profits from its rail operations.

The Sunderland-based firm, which runs trains in Wales, said its rail division boosted operating profits by 31% to £31.5m in the year to December 31.

The rise in rail profits contributed to a 15% increase in the group's pre-tax profits before goodwill and one-off items to £116.3m.

Last month, National Express trains announced increased profits of 76% on the back of higher passenger numbers. Arriva said it too had benefited from the growth in passengers and revenues across the railways, with year-on-year turnover up from £433.3m to £509m.

Arriva said Arriva Trains Wales (ATW) was performing in line with expectations while Arriva Trains Northern, which it was responsible for running until December, had achieved the highest punctuality and reliability since privatisation in 1997. Arriva's chief executive, Bob Davies, said the company would aim to continue its organic growth and targeted acquisitions. He added, "We have seen a good start to 2005".

Arriva's new franchise in Wales has faced criticism from passenger watchdogs for containing little in the way of major improvements such as new trains. However, the group said today that ATW was introducing a new timetable in December, refurbishing some existing rolling stock, upgrading Chester station and introducing ticket barriers at main stations.

Buses

Arriva said its bus operations across the UK had also done well, with operating profits rising by 9% to £62.6m. The group said it had increased passenger numbers through a number of new projects carried out in partnership with local authorities. For example, a six-year investment programme on Merseyside and a £10m upgrade of vehicles and services in the Medway towns in Kent. Arriva also signed an exclusive deal with PayPoint to sell bus tickets through the latter's national network of cash payment terminals in more than 11,000 newsagents and other retail outlets.

The company said its London bus division, which is the largest private contractor in the capital with nearly 19% of the network, retained all its existing route contracts with Transport for London and won new ones. Improved operational performance helped to boost revenue, while the division invested £26.4m in new buses and facilities in 2004, taking its total investment in the capital to £135m since 2000. It has more than 100 new buses on order for delivery by April this year.

Arriva, which has been expanding its international operations, said its operations in continental Europe were the fastest growing business in the group, with turnover doubling in the last three years and strong growth expected to continue.

The group runs trains or buses in Denmark, Germany, Italy, Sweden, the Netherlands, Portugal and Spain. It expanded the operations during the year by buying two German rail businesses, Prignitzer Eisenbahn Gruppe in north east Germany and Regentalbahn, which runs services in Bavaria and elsewhere.

The group is increasing its final dividend by 5% to 14.07p, giving a total annual dividend of 18.9p.