Thursday 23 Jun 2011
NETWORK RAIL PUBLISHES ANNUAL REPORT AND ACCOUNTS 2010/11
- Region & Route:
- National
Commenting on the report’s publication, Rick Haythornthwaite, Network Rail's chairman, said: "The past year has seen some significant progress in driving down the costs of running the rail network but we know that we still have a great deal to achieve. Under our new chief executive, David Higgins, we need to continue to focus intensely on delivering an even better value, more punctual railway for our customers and for passengers.”
Financial and performance highlights for the year:
- £400m, in real terms, cut from the cost of running the railway
- Revenue was £5,712m (2009/10 : £5,668m)
- Operating profits were £2,028m (2009/10 : £1,981m)
- Profit before tax was £438m (2009/10 : £395m)
- Capital expenditure was £3,997m (2009/10 : £3,920m)
- Net debt at year end was £25,049m (2009/10 : £23,838m)
- Gearing ratio (debt to regulated asset base) was 63.4% (2009/10: 63.9%)
- In 2010/11 90.9% of passenger trains ran on time down on the 2009/10 figure of 91.5% (mainly as a result of the severe winter weather)
Within its report and accounts, Network Rail published details on executive remuneration. For 2010/11 the remuneration committee, with the agreement of the executive directors, decided not to award any annual bonus for the year.
Rick Haythornthwaite added: “I would like to pay tribute to Iain Coucher for the very substantial role that he played in the turnaround of Britain's railways. It is easy to forget the grim situation faced by Network Rail back in 2002 with poor performance, a poor safety record and the trust and reputation of the industry in tatters. We now have a far better performing, safer railway with more numerous and more satisfied passengers than ever before.’
Notes to editors
Bonuses awarded:
Annual award | |||
Directors | 2010/11 bonus £s | 2009/10 bonus £s | Salary £s |
David Higgins | 0 | 0 | 560,000 |
Iain Coucher | 0 | 348,184 | 613,000 |
Patrick Butcher | 0 | 198,800 | 350,000 |
Robin Gisby | 0 | 187,440 | 330,000 |
Peter Henderson | 0 | 249,920 | 440,000 |
Simon Kirby | 0 | 187,440 | 330,000 |
Paul Plummer | 0 | 176,080 | 310,000 |
Total | 0 | 1,347,864 | |
- As Network Rail is not listed and is therefore unable to offer its executive directors share options as a long-term incentive for continual improving performance a cash long-term scheme was used. A new scheme is now in place (see final bullet)
- The L-TIP was a three year incentive scheme. It was used to focus the company on the long term health of the railway, not just the year ahead. It was measured against targets for the two main business challenges - train performance and delivering efficiencies. Over the past three years (April 2008 to April 2011) the company achieved 58.3% of the targets in these areas (16.7% for train performance and 100% for efficiencies) reflecting the comparatively low L-TIP payments listed below:
Long Term Incentive Plan | ||
Directors | 2010/11 £s | 2009/10 £s |
David Higgins | 0* | 0* |
Iain Coucher | See below | 293,165 |
Patrick Butcher | 0* | 0* |
Robin Gisby | 61,725 | 121,434 |
Peter Henderson | 90,723 | 210,444 |
Simon Kirby | 67,555 | 143,918 |
Paul Plummer | 62,127 | 137,380 |
Total | 282,130 | 906,341 |
- * = Not in post for the required qualification period - three years
- Iain Coucher, the company’s former chief executive, left the company during the year. On termination of his contract, he received a total compensation package of £1,075,000. This included contractual payments for pay in lieu of notice (12 months salary) and a negotiated settlement to close out potential L-TIP award rights (£370,000)
- In March, a new incentive scheme for executive directors was approved by the company's Members. Under the new scheme the potential annual bonus for executive directors has been reduced by 40% and the L-TIP scrapped. Instead a new long-term scheme is in place that potentially pays out at the end of each control period (2014, for the end of the current control period - CP4) and is tied to the outperformance of the company's targets for delivering efficiencies
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