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 | | Monday, 22 October, 2001, 16:09 GMT 17:09 UK National Express shares plunge 35%  Passengers are avoiding trains, but sticking by coaches Shares in the UK transport group National Express plunged nearly 35% after it warned that profits would take a hit from the continued disruption on the railways. The company, which runs rail franchises such as Scotrail and the Gatwick Express, said that speed restrictions imposed by Railtrack continue to affect punctuality. Managers are now forecasting that passenger numbers will not grow this year or next. While the impact on overall profits is expected to be marginal this year, profits could be hit hard during 2002, the company warned. "We believe that [customer] growth will only return when punctuality and reliability levels are back at the pre-Hatfield levels," said Phil White, chief executive of the group. Soaring insurance costs National Express has also been affected by the 11 September terrorist attacks on the US.
The company noted the significant decrease in levels of traffic through Gatwick airport, and a downturn in leisure and optional travel in the UK. But passenger volumes to National Express' coach business in September remained unchanged. Furthermore, the group's insurance premiums are likely to double to �60m because of the attacks, the company warned. Aftermath of Railtrack collapse Analysts had pencilled in pre-tax profits of �139m for the London-based group this year. Mr White said he was concerned that the collapse of Railtrack could delay the removal of restrictions for some time. "All we want is an operation that can maintain track and operate it effectively," said Mr White. The company's costs are currently under review, but there are no plans to lay off workers. At the close of trading on the London Stock Exchange, shares in the company had dropped 34.8% to 520p. | |
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