Network Rail said all profits had been reinvested in improvements such as the redevelopment of London's King's Cross

Network Rail profits soar as punctuality falls

Network Rail's annual profits have soared to more than £1bn despite falling further behind on its punctuality targets.

Profit before tax rose 39 per cent to £1.04bn for the 12 months ending in March, but the percentage of passenger trains running on time fell from 90.9 per cent the year before to 90 per cent, meaning the company again failed to meet a target of 92.5 per cent.

The company admitted train performance was disappointing saying this was partly down to "slower improvements in asset reliability" though some of the shortfall was also caused by congestion as passenger numbers grew, as well as extreme weather.

The profit hike was largely the result of accounting gains on financial hedging instruments, according to NR, and it said all profits were reinvested pointing out that it had invested £6.9bn on new stations, platforms, lifts, information systems, concourses, footbridges and new track over the last 12 months, equating to almost £20m a day.

Chief executive Mark Carne said: "We are in the middle of a rail renaissance, with record levels of passenger numbers and record levels of investment. This flourishing sector is investing heavily to improve the railway for today and for tomorrow."

According to NR, passenger numbers grew by 5.7 per cent to 1.6 billion during the year, a doubling since 1995. Meanwhile, NR's debt pile, which is guaranteed by taxpayers, increased by 9 per cent to £33bn.

Carne said with more trains on the network than 10 years ago, there were "inevitable challenges".

"We are determined to do more to improve train reliability in the face of these challenges," he continued. "We will increase the reliability of the network and make it more resilient to climate change.

"Continued investment in our railway will also be key if we are to grow our economy and deliver a better, improving, expanding rail network for millions of daily users."

Finance director Patrick Butcher said: "The last year has been one of operational and financial challenges. We have been disappointed with train performance but celebrate continued strong growth, savings made, swiftly repairing the railway following extreme weather and hundreds of projects completed to improve and expand the railway."

Highlights for the year included better facilities at London's King's Cross station after a £550m renovation, and a new concourse at Reading as part of an £850m project to unblock what NR described as one of Britain's worst railway bottlenecks.

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