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Thursday 6 Jun 2013

Network Rail full-year results 2012/13

Region & Route:

National

Network Rail invested more than ever before (in cash terms) – some £14m a day (£5bn for the year) – in renewing and expanding Britain’s railway in 2012/13, the company announced today in its full-year financial results.

It has been a challenging year on train performance, influenced by bad weather, and as a result the company faces a tough final year of the control period to meet stretching efficiency targets.

Group finance director, Patrick Butcher, said: “The challenge we have faced over the last year, and will continue to face in the years ahead, is one of success – more people wanting to use more trains, more of the time. Over the last 12 months we have invested an unprecedented amount in growing and expanding the rail network through over 2,000 projects nationwide.

“However, the economic times in which we live mean that alongside delivering new capacity we need to keep a constant drive for improved efficiency. Our overall financial performance remains strong and we are on track to deliver over £5bn of cost savings for the five years to 2014.

“Building capacity and driving efficiency while maintaining performance at today’s historical high levels lie at the heart of our bid for funding for the next five year control period (2014-19) and the future of the company.”

Financial highlights

• Revenue was £6,197m (2011/12: £6,004m)
• Operating profit was £2,217m (2011/12: £2,347m)
• Profit after tax was £699m (2011/12: £761m)
• Capital expenditure was £5,050m (2011/12: £4,600m) contributing to an increased asset value of £46,411m (2011/12: £43,112m)
• Net debt at year end was £30,358m (2011/12: £27,282m) with a gearing ratio of 65%, comfortably within our regulator’s 75% limit

Operating costs

• Operating costs increased from £3,657m last year to £3,980m this year. Of the £323m increase, £113m was related to depreciation with £58m related to damage caused by extreme weather
• Staff costs increased to £1,779m from £1,679m. Average staff numbers fell to 35,190 from 35,253

Performance results

• In 2012/13 90.9% of passenger trains ran on time, slightly down on 91.6% last year but still the third best year on record
• Passenger satisfaction reached a record high of 85% with customer (i.e. passenger and freight train operator) satisfaction rising to 66% from 43%
• Performance is at historically high levels and despite our best endeavours the weight of traffic and extreme weather means that regulatory performance targets for the end of the control period will be very challenging to meet. We continue to make improvements and aim to raise punctuality to as high levels as possible
• In ten years, Network Rail has added over a million more train services a year, increased passenger journeys by half a billion and doubled the number of passengers arriving on time
• Passenger growth is running at double the rate forecast in 2009

Projects
Network Rail is managing many vital enhancement projects to add capacity to the railway and drive economic growth. Some highlights include:

• The £130m Edinburgh Waverley station improvement project achieved substantial completion in December 2012 with a new roof, better lighting and access and improved customer facilities and information systems
• The Thameslink programme reached significant milestones including the new stations at Farringdon and Blackfriars (including one of the largest solar arrays in Europe) and completion of 12-carriage capability at all stations north of the Thames. Work now starts in earnest at London Bridge on the most complex station remodelling ever attempted
• On the West Coast Main Line, the team completed the remodelling and resignalling of the Bletchley area with new more reliable equipment delivering a layout more suited to current and future requirements
• The King’s Cross project has been an outstanding success. Its transformation will come to an end this autumn with the completion of the new King’s Cross Square
• The rebuilding of Birmingham New Street hit a key milestone on April 28th with the opening of the first part of the new station, enabling the closure of the old concourse to allow it to be rebuilt
• The c£895m Reading station redevelopment is now on target to be completed a year ahead of schedule in 2015. Significant track and signalling upgrades during Easter, and the opening of the massive new footbridge and new platforms, mark the first phase in unblocking the Reading bottleneck

Organisation
Network Rail completed the major part of its internal restructuring during the year that saw the devolving of control from the centre to improve safety, service and efficiency. Highlights were:

• The new structures, accountabilities and responsibilities for the ten operation routes completed and bedded in
• Continued development of alliances with both train operators and suppliers to better deliver projects and customer service

Mr Butcher concluded: “The last year has been one of operational and financial challenges. We have been disappointed with the slowing of train performance improvements but celebrate continued strong growth, savings made, better passenger and customer satisfaction and hundreds of projects to improve and expand the railway completed.”