Railtrack plc

Railtrack Group PLC announces 38% increase in investment spend and 9% increase in operating profits for half year
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date 13 November 1997
source Railtrack plc
type Press release

o 38% increase in investment spend to £520 million
o 9% increase in operating profit to £184 million

Railtrack Group PLC, custodians of the country's railway infrastructure, has increased its investment spend by 38% and made a nine per cent increase in operating profit, to £184 million, for the six months ended 30 September.

Announcing the half-yearly figures today, Railtrack Chairman Sir Robert Horton, said the company continued to deliver against its objectives with sound operational performance, a substantial increase in investment spend, increased efficiency and growing returns for shareholders.

"Our trading experience to date is broadly in line with expectations", said Sir Robert. "The remainder of the year should be a continuation of the trends established in the first half - a steady operating performance, combining with a sharp increase in investment and continuing cost efficiencies," he said.

Adjusted earnings per share for the half year before Windfall Tax, for the half year were 33.6 pence per share as compared to 29.0 pence for the same period last year. After charging Windfall Tax of £155 million, earnings per share were 2.6 pence per share.

An interim dividend of 7.9 pence per share to be paid on 6 February 1998, represented an eight per cent increase in line with the company's progressive dividend policy.

Revenue for the period was £1,226 million, with passenger track access income accounting for 86 per cent of the total. Passenger track access income increased by one per cent to £1,060 million - compared with £1,046 million in 1996 as a result of the application of the RPI minus two per cent formula.

Freight income increased slightly on the period to £80 million (£79 million in 1996) from a growth in non-coal traffic. Property income saw a five per cent increase to £61 million (£58 million in 1996) due to a rise in property lettings. An increase in Eurostar traffic caused other income to grow by 19 per cent to £25 million (£21 million in 1996).

Sir Robert stated that Railtrack and Government share a belief that Britain needs a growing rail network at the heart of an integrated transport system. He said. "We will work with the Government in our common objectives of increasing investment in a safe and efficient network, improving performance, developing public and private partnerships, growing freight and passenger traffic, adding capacity and becoming a more customer-focused, responsive company.

"Our core skills include engineering and project management and we remain interest in and committed to the future expansion of Britain's rail network. The future of the Channel Tunnel Rail Link and London Underground are matters for Government and the existing stakeholders. If consulted, and bearing in mind the interests of our own shareholders, these are projects which we will review, should the opportunity arise. At this stage no serious discussions have taken place."

Other highlights for the half-year included:

Property - profits from property disposal were £21 million (1996 - £23 million).

Performance - last year's strong operational performance maintained whilst accommodating increased investment activity and a five per cent increase in the number of trains travelling on the network. Series of initiatives currently being implemented which will deliver future performance improvements.

Investment - commitment to the major investment programme continued with a 38 per cent increase in total asset-related investment spend to £520 million for the period. Station regeneration accounted for £65 million with 90 projects completed and a further 130 currently on site. In addition, 600 stations have agreed programmes of work with the train operating companies.

Railhub Archive ::: 1997-11-13 RTK-001