Railtrack's first year...
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Railtrack's first year...
type Press release
Railtrack's first year sees public sector values combined with private sector enterprise deliver:
Operating Profit up 15 per cent to £339 million
Passenger train delays down 30 per cent
Investment up 30 per cent
In a year which saw "the most sweeping changes in the railway industry for 50 years", Railtrack made an operating profit of £339 million - a 15 per cent increase over the previous year.
Reviewing the preliminary results of the year ending 31 March and the first one in the private sector, Chairman Sir Robert Horton said the lifting of public finance constraints and other nationalised industry controls had freed Railtrack to take a more ambitious approach to raising its operating performance through a large scale long term investment programme that would produce a railway network fit for the 21st century.
Describing it as "a momentous year," Sir Robert said he was confident that Railtrack's achievements to date had set firm foundations for a safe, efficient, reliable, and profitable railway network expanding its role at the centre of Britain's transport infrastructure.
"The tangible improvements in service which we promised are being delivered and we continue to pursue our ambition to create the world's best railway," he said.
To this end Railtrack had contributed a reduction in minutes delay for passenger services of about 38 per cent over last year while the figures for passenger services as a whole had improved by about 30 per cent.
Looking to the future, Sir Robert said it was Railtrack's intention to co-operate with the train operating companies to promote significant growth in passenger numbers and large scale transfer of freight from roads.
"This is our strategy for creating a competitive edge over road and air travel and thereby making rail the obvious first choice," he said. "We are impressed by the energy, vision and commitment that the new franchise operators - both passenger and freight - bring to the development of railway services. The congestion and pollution in our cities and opposition to new road construction makes rail the logical, convenient and environmental answer to Britain's transport needs."
Referring to the proposed spending of £4 million pounds a day over the next 10 years - made up of £5.7 billion on day to day maintenance, £8.3 billion on renewing existing infrastructure and £1.9 billion on major projects - Sir Robert said Railtrack was committed to the plans as they would "deliver real benefits for our customers, the travelling public and provide a return for our shareholders."
He said: "Our investment strategy is simple: by renewing the infrastructure we will seek to drive down our day to day maintenance costs and the resulting regenerated railway will provide enhanced returns through improved performance.
"Railtrack now has the necessary balance sheet strength and freedom from the short term constraints of public spending to renew and enhance a vital national asset," he said.
"In years to come," he added, "I believe 1996-97 will be seen as a turning point in the history of the UK railway industry. We are leaving behind decades of under-investment to allow our customers and user groups to shape our future agenda."
In his review of the year, Chief Executive John Edmonds said Railtrack's investment plans exceeded the amount the Rail Regulator allowed in access charges by £1 billion in the years to 2001 and the company was already £105 million ahead of the programme and investment during 1996-97 was £961 million, a 29 per cent increase over the previous year.
In physical terms it meant that Railtrack would renew 2,500km of rail, 5,500km of sleepers and 6,000km of ballast but the largest single element of expenditure would be on resignalling which accounted for £2 billion.
Production of timetable, one of Railtrack's primary responsibilities, was now achieving "unprecedented levels of accuracy," said Mr. Edmonds.
"We are keen to find ways of making the timetable more widely available and in January we posted the timetable on the Internet where it is continually updated from the Railtrack timetable database."
To date, he said, the timetable had received over 3.25 million enquiries from all over the world with demand still growing and enquires now averaging over 200,000 each week.
On the freight front, the Chief Executive said Railtrack intended to develop the network with new terminals, improved freight routes, reduced transit times and fewer delays by working closely with freight customers to gain a fuller understanding of the potential for growth and the implications for the network.
Looking ahead, Mr. Edmonds said it was becoming clear that Railtrack and its customers shared a vision of what could be achieved by working together.
"We are exploring promising investment opportunities with our principal customers which in due course will lead to the upgrade of passenger and freight services that are necessary if rail is to be the consumer's preferred choice," he said. "This past year has been a very encouraging year as better management of today's railway has achieved real gains in performance and efficiency."
It had, he said, been a question of combining the best public service values and private sector enterprise.
"But we must look for continuous improvement and we must ensure that the necessary investment in transport infrastructure is well planned and controlled," he added.
Finance Director Norman Broadhurst said Railtrack had passed "smoothly from the public to the private sector" and against such a background had achieved sound financial results.
Profit before tax on a proforma basis, calculated as if the changes in capital structure on flotation had taken place on 1 April 1995, increased by 27 per cent to £346 million. Earnings per share on the same basis increased from 53.8p in 1995/96 to 58.4p for the year ended 31 March 1997.
The Directors, said Mr. Broadhurst, recommended the payment on 26 September 1997 of a final dividend of 14.8p per ordinary share. Together with the interim dividend of 7.3p paid on 11 February 1997, this would make a total dividend for the year of 22.1p per ordinary share compared with the proforma dividend per share in 1995/96 of 20.6p.
Net contributions from the performance regimes in 1996-97 were £26 million, compared with a deficit of £5 million in 1995-96. Receipts from the train operating companies had increased by £81 million, which was offset by a £26 million increase in the provision for severe weather and other matters. Payment to Railtrack's suppliers had risen by £24 million, reflecting their contribution to the overall improvement in performance.
"Railtrack's financial performance to the end of the century will, however, depend largely on reducing costs through efficient management, increased investment to improve performance and lower on-going maintenance costs, re-negotiation of maintenance contracts, increased competitive tendering and new technology," said Mr Broadhurst.
Railhub Archive ::: 1997-06-05 RTK-001