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Operational performance

Strong performance in delivery of Rail franchises in 2008, including meeting all first year commitments for East Coast.

Robust growth in UK Bus and Coach, with enhanced efficiencies and cost savings from integration.

Excellent customer retention in North America bus, supported by $38 million new contracts; steady progress in Business Transformation project with pilot now in two US states.

In Spain, full benefit of Continental Auto integration, delivering over 40% profit growth in local currency.

Outlook

Rail business expected to remain profitable in 2009, despite recessionary environment, through delivery of revenue and cost initiatives in East Coast and revenue support in East Anglia.

North America and UK Bus benefiting from lower economic sensitivity, combined with ability to manage service and cost base in Spain and UK Coach.

Strong focus on cash management and debt reduction, supplemented by rebased dividend, to deliver additional cash benefit in excess of £100 million in 2009.

Financial highlights

Continuing revenue

+5.9%

to £2,767.0 million (2007: £2,612.3 m)

Normalised* operating margin excluding discontinued operations

9.2%

(2007: 8.1%)

Normalised* profit before tax

+9.7%

to £194.1 million (2007: £177.0 m)

Normalised* diluted earnings per share

+11.6%

to 93.6p (2007: 83.9p)

Total dividend per share for the year

22.72p

(2007: 37.96p)

* Normalised results are the statutory results excluding the profit or loss on the sale of business, exceptional profit or loss on sale of non-current assets and charges for goodwill impairment, intangible asset amortisation, exceptional items and tax relief on qualifying exceptional items.