National Express shares were up 5.6% to 238p in late afternoon trading following a positive Q1 2022 trading update from the company, with a reported return to 2019 pre-Covid-19 revenue levels.
The results marked the seventh consecutive quarterly improvement for the travel group, with a year-on-year revenue increase of 30% in constant currency.
National Express commented it had renewed confidence in its short and long-term guidance, including annual revenue set to fall in line with 2019 levels, with a delivery of at least £1.25 billion of free cash flow between 2022 and 2027 inclusive.
The company said it enjoyed particularly strong recovery across its UK and ALSA coach businesses, which the group attributed to widespread pent-up demand for travel among consumers.
“We have made a good start to the year and it’s pleasing that revenues have bounced back to 2019 levels, improving through the first quarter,” said National Express CEO Ignacio Garat.
“The strong recovery in our discretionary coach businesses in both the UK and Spain shows the pent-up demand for travel which is further evidenced by our strong trading over Easter.”
The firm also noted that its fuel was 100% hedged for 2022, 69% for 2023 and 33% for 2024 at prices at 2021 levels or below.
National Express added that it was securing rate increases ahead of wage inflation on renewed contracts as it continued to work towards mitigating US School Bus driver shortages.
The travel company highlighted a slate of growth opportunities going into the coming quarter, including active involvement in a selection of bids in North American Transit and Shuttle.
The group also celebrated its success in gaining a place on the short list for an urban bus contract in Dubai, and noted the first of its new Portugal contracts scheduled to kick off operations in June 2022.
“We continue to believe that our proposed combination with Stagecoach, with at least £45 million of run-rate synergies, represents a superior value creation opportunity to the DWS offer,” said Garat.
“However, we will remain disciplined in the assessment of our options going forward.”
“Looking ahead, having made an encouraging start to 2022, we anticipate further strong recovery in demand over the balance of the year, and are confident of delivering further improvements in performance during the year.”
