Profits dip at public transport giant Arriva

Mar 3 2010 By Karen Dent, The Journal

BUS and train giant Arriva's profits have dropped during what it called a "challenging" year when passengers struggled with the recession and it was hit with a £60m rise in fuel prices.

The Sunderland business said pre-tax profits dipped by 19% to £121.7m from £150.0m in the year to the end of December. But it still managed to push up its income by 3% to £3,147.8m from £3,042.2m in 2008.

The group, which operates buses in 12 European countries including the UK and runs the CrossCountry and Arriva Trains Wales rail franchises, said it would benefit from lower fuel prices this year.

Chief executive David Martin said: “Throughout the year we worked on business improvement measures to counteract the effects of a deep recession throughout Europe, and the legacy of unusually high fuel costs.

“Decisive management action has bolstered our already strong underlying performance, and will continue to deliver benefits in 2010 and beyond.”
Income from the CrossCountry rail service did not match Arriva’s hopes and meant the profits of the rail division plunged from 2008’s record £33.7m to £12.1m.

But Mr Martin said: “Operationally, both UK rail franchises are amongst the highest performers in the UK, having improved consistently over recent years.

“Both experienced encouraging improvements in passenger revenue growth in late 2009, which have so far followed through into 2010.

“Passenger revenue in CrossCountry is up by 8.8 per cent in the first seven weeks of 2010, helping to offset the lower franchise support payments it will receive in 2010.”

The UK bus division’s operating profit fell to £91.2m from £99.3m but the figure rose by 7% from £83.9m for the group’s services on mainland Europe.

Arriva has trebled the size of its European bus and train interests in the last six years and says it remains in the hunt for more.

Group chairman, Sir Richard Broadbent, said: “Our long-term strategic vision, of being acknowledged as Europe's leading transport operator, remains unchanged.

“Although the business environment remains volatile we continue to bid for, and win, new business.”