Arriva's profits jump by 30%

Mar 5 2009 By Karen Dent, The Journal

BUS and train giant Arriva has driven up its profits by 30% and says it is confident of riding out the recession.

The Sunderland-based company, which runs public transport in 12 European countries including the UK, made pre-tax profits of £150m last year.

The figure, for the 12 months ending on December 31, was slightly less than city analysts expected and Arriva says 2009 is likely to be a tough year.

But chief executive David Martin said: “Nonetheless, Arriva’s high cash generation, diverse portfolio and relative lack of sensitivity to passenger revenue increase the group’s resilience against recession affecting European economies.”

Arriva’s UK bus revenue jumped by 13% to £922.4m. It has invested more than £130m putting 460 new buses on the road during 2008 and a further 500 are coming into service this year.

Its Arriva Trains Wales and CrossCountry rail franchises brought in £837.8m - up 160% on the previous 12 months as the group marked its first full year running the CrossCountry route from Aberdeen in North East Scotland to Penzance in the South West England.

CrossCountry was the first in the UK to introduce e-tickets along the length of its route last year which mean customers can buy their ticket online and print it off at home the day before travelling. Arriva is now working on a system to book and buy tickets by mobile phone.

Higher fuel costs will set the company back around £60m this year but because it buys ahead - a practice called ‘hedging’ -  it has already secured a big part of next year’s fuel for less than it is paying at the moment.

Mr Martin said: “Public transport is a long term business with deep roots. Even against the current background of economic downturn and financial sector crisis, attractive, integrated public transport networks are increasingly seen as a kingpin for long-term prosperity all over Europe.”