New route boosts Arriva’s profits

Posted by admin on 23 August, 2008 under Business news | Be the First to Comment

Transport group Arriva says the addition of Cross Country rail services has helped its UK trains division boost half-year profits by 40%.

The Sunderland-based firm’s rail operating profits increased to £14.8m from £1.1m since acquiring the Aberdeen to Penzance franchise in 2007.

Arriva said it had also bucked rising fuel prices by securing supplies on fixed deals in advance.

The company runs more than 16,000 buses and trains across the UK and Europe.

Overall, group revenues were 59% higher at £1.44bn, with profits up to £66.3m from £47.3m a year earlier.

New vehicles

Chief executive David Martin said: “Our focus on Europe’s diverse transport markets gives us resilience and great potential for further growth.”

Arriva has warned that higher fuel prices and the economic downturn presents challenges for the future, but says its fuel costs this year have been “substantially fixed”, with two-thirds of the requirement for 2009 also secured in advance.

The company’s UK bus division increased operating profits by 20% to £45.5m, based on a 14% rise in revenues to £454.5m.

The firm is planning to bring more than 460 new vehicles into service on its regional bus network during this year.

The Arriva Trains Wales operation also contributed to the improved performance of the UK rail division.

Arriva shares closed up nearly 7% at 509.5 pence on Friday.

News reported by The BBC