National Express Group Plc fell the most in three years after the U.K. coach and train operator said business in 2013 will be “challenging” as government cutbacks in its home market and Spain hurt bus-division prospects.
Declining economies and rising fuel costs are “likely to constrain progress” next year after the company meets earnings targets in 2012, London-based National Express said today in a statement. The stock fell as much as 10 percent to 185.5 pence, the biggest intraday decline since Nov. 11, 2009, in today’s worst performance on the FTSE 250 Index. (MCX)
Britain and Spain are in recessions as governments reduce spending to narrow budget deficits. National Express reported increases in third-quarter revenue today at all its divisions in the two countries and North America, with actions such as fare cuts helping offset changes in rules or contracts.
“The results today were solid but they highlighted that in 2013 they may not be able to fully replace rail earnings from the East Anglia franchise,” Alexia Dogani, an analyst at Liberum Capital Ltd., said by phone. “Today’s update also highlighted revenue trends have softened, especially in Spain and U.K. coach, so 2013 consensus estimates are likely to be reduced.”
National Express was trading down 9.8 percent at 2:34 p.m. Volume was more than double the three-month daily average.
The company lost its East Anglia rail franchise in the U.K. in February, reducing its train operations to a single service, C2C, whose contract expires in 2013. It also runs buses and coaches in the U.K. and Spain and school buses in North America.
Revenue at the U.K. coach business has been held back by the withdrawal of a government concessionary program for older long-distance travelers, with 1 million fewer journeys expected in 2012, National Express said. Austerity pressures in Spain have led some municipalities to drop contracts, it said.
National Express revenue totaled 2.2 billion pounds ($3.6 billion) last year.
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