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Thursday 26 May 2005

NETWORK RAIL INFRASTRUCTURE LIMITED – PRELIMINARY RESULTS FOR THE YEAR TO 31 MARCH 2005

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National

£400 MILLION OPERATING PROFIT CAPS A YEAR OF SUBSTANTIAL IMPROVEMENT Network Rail today published its preliminary results for the year to 31 March 2005.  The improvement in train performance and efficiency that began during the previous year has been sustained over the past 12 months, and is accelerating. The financial and performance highlights for 2004/05, compared with 2003/04, include: Financial highlights ·                 Operating profit of £407m, compared to last year’s operating loss of £758m  ·                 Performance regimes delivered £102m of income, compared to penalties of £348m last year ·                 Net debt increased from £12.6bn to £15.6bn but remains well below previous projections Performance results ·                  A 17% reduction in Network Rail delay minutes, down to 11.4m minutes from 13.7m minutes ·                 An increase in the proportion of ‘on time’ trains, as indicated by the Public Performance Measure, from 81.2% to 83.6% ·                 Freight market growth continues with a 4.2% increase in gross tonne miles in the last year ·                 In partnership with train operators, seven integrated control centres have been created across the country.  They are delivering tangible performance benefits of up to a 30% reduction in delays per incident – the measure most impacted by the speed of decision-making Safety indicators ·                 SPAD (Signals Passed At Danger) risk has, on a two-year basis, decreased by 61% to its lowest ever level following the completion of the Train Protection and Warning System (TPWS) project ·                 Broken rails surpassed last year’s all-time ‘lowest ever’ record of 334 and fell a further 3.6% to 322. Five years ago these stood at more than 900 per annum Asset condition ·                 In the last year 626 miles of new rail were laid, 511 sets of points installed and 450 miles of ballast renewed.  This represents nearly double the activity levels of just five years ago ·                 Points failures dropped by 11% and track circuit failures fell by 7% ·                We have invested heavily in the most advanced high output machinery in the world, machines with the potential to slash work times and increase productivity by more than 50%: Ø      One high output track renewal train and wagons (£17m) Ø      Two high output ballast machines (£26m each) Ø      Other plant to complement these high output systems (for example, dynamic track stabiliser) (£19m) People ·               The incorporation of 15,000 maintenance employees was successfully completed during the summer and has delivered reduced costs and improved performance ·                Network Rail has embarked on an ambitious programme of employee development: Ø      £20m purpose built leadership centre just purchased in Coventry Ø      Foundation degree course in railway engineering in its second year at Sheffield Hallam University Ø      Advanced apprentice scheme for over 1,000 17-18 year olds starts in September at HMS Sultan in Gosport Ø      State-of-the-art signaller training centres opened in Leeds and Watford Ø      Skills and competence training for all maintenance employees well underway Commenting on the year, Chairman Ian McAllister said: “The last year has been a successful one.  The improvement that began during the previous year has been sustained and is accelerating.  For 19 successive months we have witnessed year-on-year improvement in delays attributed to Network Rail and the bar has been raised with even tougher targets introduced for the future. “During 2004/05, delays caused by the rail infrastructure reduced by 2.3m minutes.  This 17% reduction means the target set by the Office of Rail Regulation has been exceeded by nearly 900,000 minutes.  The achievement in bringing down delays is a tremendous accomplishment of which everyone in the Company is justly proud. “Along with the marked improvement in train performance, the year has also seen a significant improvement in our efficiency and financial results.  Real savings are now coming through, which have contributed to a return to operating profit.  “In the year to come our objective is to build on these improvements – maintaining the good safety record, making the railway more efficient and making trains more punctual.” Commenting on the financial results, Group Finance Director Ron Henderson said: “This has been a year that has given us a great deal of encouragement as we begin to see the benefits of doing the right things in the proper way.  The focus on strong budgetary control has resulted in savings being delivered and close control of spend has led to net debt being much lower than anticipated as we seek to deliver tangible value-for-money improvements. “We are confident that continuing to build on this will give us not only a financial rigour that can be relied upon but also a railway of which we can be proud.” Chief Executive John Armitt concluded:  “During the last year, Network Rail’s 30,000 employees have taken considerable strides towards our objective of delivering a safe, reliable and efficient railway. “The year to come will see Network Rail’s employees continue to work hard to meet our objectives as we target a further substantial reduction in delays and further efficiency savings.  The rebuilding of the railway goes on, progress is good, and passengers and train and freight operators are now seeing real benefits.  We are determined to deliver further improvements. “I thank our people for their commitment and energy over the last 12 months.  I would also like to thank the freight and train operators who have worked so hard to help us deliver the turnaround this year.  Working together in partnership with our customers is the best way to deliver success for the industry and I am grateful for their support.”