Terror attacks hit demand for coach travel, says National Express

Profits at the coach arm were down £1m, to to £9.4m, in the first six months of the year.

National Express said: "UK Coach enjoyed a strong start to the year, but has more recently been impacted by a reduction in transport demand after recent terrorist events." The company said it expected the subdued demand to continue during the rest of the year.

However, despite what it called "challenging UK market conditions" profits were up at the Birmingham-based transport group.

Pre-tax profits rose almost 19% to £64.6 million, and even after stripping out the impact of selling its c2c rail franchise and pulling out of UK train services profits were still up 10% at £50.8m. Revenue in the first six months was up 16% to £1.17 billion.

The company said this morning it now generated 80 per cent if its earnings outside the UK, running buses in the US, Spain and Morocco and trains in Germany.

But it is still the major bus operator in the West Midlands, employing around 3,700 bus drivers across the region. While profits and revenue as been broadly flat over the first six months, National Express has hailed the success of its low fares scheme.

"The results so far have been very encouraging and are helping to drive commercial growth in revenue and patronage in the second quarter of the year," said the company.

"The first low fare zone to be introduced – in Dudley – has already boosted passenger growth by over 3.5% and revenue by over one percent, with a positive momentum being maintained.

"Our second low fare zone, in Walsall, is seeing similar results. We have recently introduced another low fare zone in East Birmingham, alongside some other targeted price promotions, and the early results are also positive. We will be bringing others in shortly and look to further capitalise on this improving trend."

An improved mobile phone app was also seeing more than 10,000 tickets sold a day. It is also rolling out contactless payment across the bus network later this year.

Earlier this year the new Transport for West Midlands agency decided to take the running of the Midland Metro into its own control. It had been run by National Express since it launched and the company said it was now in talks with TfWM "to ensure a smooth transfer".

Meanwhile, overseas National Express said it had made good progress, with its North American and Spanish & Moroccan (ALSA) divisions both delivering record half year operating profit.

Chief executive Dean Finch said: "We have delivered a strong set of results, again benefiting from our internationally diverse portfolio of cash-generative businesses.

"Record half year performances in our North American and Spanish & Moroccan divisions have more than offset more challenging trading in the UK. I am particularly pleased with the strength of our free cash flow, which provides us with opportunity for further investment and improving returns.

"We continue to see the benefit of our recent acquisitions in driving good growth and creating shareholder value. These acquisitions are also helping us to expand in new growth markets, but we will remain disciplined in the opportunities we pursue.

"We also of course retain our focus on operational excellence and customer service to drive growth and efficiency in our existing businesses, and the initial success of our low fare zones in UK Bus are particularly encouraging. Our confidence in the strength of our approach to deliver growing shareholder value is demonstrated by a further 10% increase in the interim dividend."