Media centre

Thursday 24 Nov 2005

NETWORK RAIL INFRASTRUCTURE LIMITED INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2005

Region & Route:

National

Network Rail has announced a further acceleration in the rate of improvement in the performance of the railway network in the past six months. Announcing its interim results, the company reported that more trains are running on time, that the condition of the railway assets is improving significantly and that financial efficiencies continue to be made. At mid-September 2005, 85.1% of trains were arriving on time (on a moving annual average basis), compared with 81.8% punctuality at the same point last year.  These improvements are a product of the ever-closer working relationship between Network Rail and the train operating companies. The delays to trains caused by Network Rail are also falling dramatically with a 12% reduction in the year-to-date. Alongside improving punctuality, Network Rail is also making strides to meet the Office of Rail Regulation’s (ORR) 31% efficiency target and maintain the financial sustainability of the railway in the future. These financial results show continued progress, with a small increase in operating profit and net debt levels still below those forecast. Financial highlights include: ·         Operating profit for the six months to 30 September 2005 was £269m, compared to £257m for the same period in 2004/05 ·         Turnover for the six months to 30 September 2005 was £1,900m, compared to turnover for the comparative period in 2004/05 of £1,874m.  Turnover to 30 September 2005 includes £54m net performance income (2004/05: £51m) ·         Total operating costs excluding depreciation have decreased by £84m ·         Loss before tax of £108m compares to a loss of £8m for the same period in 2004/05 due primarily to an increase in finance costs of £153m, a reduction of £36m in profit on sale of properties, offset by an increase of £77m in investment income. ·         Net debt increased from £13.9bn to £16.8bn in the 12 months to 30 September 2005.  The increased level of net debt resulted in finance costs of £466m for the period (2004/05: £313m) Ian McAllister, Network Rail’s Chairman, said: “It is now three years since Network Rail became responsible for the stewardship of the railway network. The company is very proud of the achievements that have been made in that time – making trains more punctual the network progressively safer and more cost efficient. The public is demanding of its railway network and rightly so. We will work hard to continue to deliver an improving railway in the months and years to come.” Announcing the interim financial results, the company also revealed other achievements in the past six months, which include:

• Safety – key safety indicators, such as broken rails and risk from signals passed at danger, now stand at the lowest level ever recorded
• Investment in infrastructure – £1.4bn has been spent on renewals and enhancements in the last six months; Network Rail has also been developing a strategy to leverage funds from third party developers to invest in stations across the country, and the company will be upgrading the rail infrastructure serving the Olympic site
• Investment in people – for signallers, two new signalling training schools in Watford and Leeds; a new maintenance apprenticeship scheme in Gosport near Portsmouth, and the Network Rail Leadership Centre in Westwood near Coventry
• Advance ticket sales – substantial improvements have been made in giving operators advance notice of engineering works and fixing the timetable not less than 12 weeks ahead of the date of travel, which means tickets are now available for sale much earlier than was previously the case
• Increased freight traffic – 21 new paths created to transport coal, which will help power stations prepare for the winter ahead

Looking forward to the rest of the year, Ian McAllister added: “Our financial focus remains on delivering the ORR target of 31% efficiencies in the current control period in an environment of tight budgetary control.  We will continue to demand maximum value from every pound spent. This, along with the continued success of our debt issuances, is what we see as the cornerstone of securing the long term financial viability of our railway network.”