MARKET REPORT: National Express on the road to recovery as commuters ditch trains for coaches amid the rail strikes
A surge in demand for coach travel has boosted National Express as commuters ditch trains amid the rail strikes.
As its post-pandemic recovery continued, the FTSE 250 group said scheduled coach revenues were 87 per cent higher in the first three months of the year than in the same period of 2022.
The increase was partly driven by a recovery from Covid, which shut parts of the network.
But it has also benefited from strikes which disrupted rail services for over nine months. However, the company faced its own troubles with bus drivers striking for six days during the quarter.
The strikes ended toward the end of last month after an improved pay offer was accepted.
All aboard: National Express said scheduled coach revenues were 87% higher in the first three months of the year than in the same period of 2022
Revenues rose by a quarter to £774.4million in the first three months of the year and the shares were up 4.4 per cent, or 5.1p, to 120.4p.
An eight-day winning streak for London’s top index came to an end as the FTSE 100 fell 0.1 per cent, or 10.67 points, to 7898.77. The FTSE 250 was down 0.5 per cent, or 95.47 points, to 19,200.85.
UK inflation eased but remained above 10 per cent in the year to March. Analysts said the Bank of England is likely to continue hiking interest rates – a prospect that hit property landlords.
British Land fell 1.5 per cent, or 5.8p, to 385.7p and Land Securities slid 1.3 per cent, or 8.6p, to 637.4p.
Redde Northgate, the van hire firm, eyed higher profits amid strong demand.
Its profit for the year to April 30 should come in at the top end of the £149.6m to £164.4million range analysts gave, it said. Shares surged 4.3 per cent, or 15.5p, to 380p.
Pendragon enjoyed a better than expected first quarter as the car dealer’s profit soared 23 per cent to £23million. It expects to ‘comfortably outperform’ its previous expectations for 2023, and climbed 5 per cent, or 0.86p, to 18.06p.
The chief founder and chief executive of Procook said trading will remain ‘challenging and unpredictable’ after a dip in sales.
Stock Watch – Cake Box
Cake Box, maker of egg-free cakes, ended its financial year on a high after sales picked up and cost pressures eased.
Revenues for the 12 months to March 31 rose around 5 per cent while profit met City expectations.
Sales rose 7.8 per cent during the second half, compared to 2.1 per cent in the six months to September 30.
It came as higher energy and raw materials costs driven by war in Ukraine stabilised.
Shares, which listed at 108p in 2018 and peaked at 426p, rose 5.9 per cent, or 7p, to 125p.
Daniel O’Neill’s comments came as the Gloucester cookware retailer’s revenue fell by nearly a tenth year-on-year to £62.3million for the 12 months to April 2.
It warned that it merely broke even during the period. Shares plunged 12.5 per cent, or 3.8p, to 26.6p.
Online food delivery giant Just Eat Takeaway has increased its earnings guidance for 2023 despite another steep fall in orders – by 11 per cent in the UK and Ireland over the first quarter of the year and 14 per cent across the group.
By gross transaction value (GTV), orders fell 6 per cent in the UK and Ireland and 8 per cent overall.
It is now forecasting earnings of £243million for the year, up from £198million. The group has been slashing costs to offset the slowdown in takeaway demand as the boom seen during the pandemic fades.
Last month, it announced plans to axe around 1,700 delivery driver jobs and 170 head office roles. Just Eat employs around 15,000 workers globally.
But chief executive Jitse Groen said it will return to orders growth, albeit with the recovery skewed towards the end of the year.
He said: ‘Just Eat continues to recover from last year’s deceleration, with the northern Europe and the UK and Ireland segments leading the trend.
‘While the year-on-year GTV decline in the first quarter of 2023 is significant, the comparison is with the quarter with the second highest GTV of the pandemic.
‘Our efforts to improve profitability are running ahead of plan.’
The company said the drop in orders by value improved throughout the first quarter, to a decline of 5 per cent in March.
It also unveiled a plan to buy back up to £132million of shares. The stock rose 0.1 per cent, or 2p, to 1438p.