A combination of rolling stock problems and the onset of the recession drove profits at Hull Trains down by almost a quarter in the year to 31 March 2009, according to the company's annual accounts. The company, Britain's first "open access" train operator, is a subsidiary of transport giant First Group. The combination of rolling stock problems and the onset of the recession resulted in sharply increased costs and reduced revenue growth.
The troubles began in January 2007, when one of the company's Bombardier-built Class 222 diesel trains was severely damaged whilst undergoing maintenance at Bombardier's plant. Short-term leasing was required, which boosted costs.
Eventually a spare Class 180 unit was leased from Angel Trains. These five-car sets were originally built for First Great Western, and offered the opportunity to increase capacity on the company's services between London King's Cross and Hull. Consequently, the decision was taken to release all the Class 222 units for reallocation to East Midlands Trains, and take Class 180 units instead. However, the directors report that continuing problems with the reliability of these trains dented performance. This, coupled with the economic downturn "severely affected the company's profitability in this and the following year."
Thus, though the accounts show that in the year to 31 March 2009 revenue was ahead by more than 10%, the gain was more than wiped out by an increase of almost 20% in operating costs, so diriving operating profits down by 23% to £3.3m. Reduced net interest earnings also contributed to lower pre-tax returns. However, profit margins remainded strong, at 14.8%, even though this was well down on the 21.3% earned in 2008.
Financial Report
Hull Trains Company Limited
Results
| Year to | 31 Mar 09 | 31 Mar 08 | Change |
|---|---|---|---|
| Item | £000 | £000 | % |
| Turnover | 22,269 | 20,133 | +10.6% |
| Operating Costs | 18,976 | 15,853 | +19.7% |
| Operating Profit/(Loss) | 3,293 | 4,280 | -23.1% |
| Other Costs/(Income) | (161) | (177) | -9.0% |
| Pre-Tax Profit/(Loss) | 3,454 | 4,457 | -22.5% |
| Tax Payable/(Credit) | 969 | 1,354 | -28.4% |
| Net Profit/(Loss) | 2,485 | 3,103 | -19.9% |
| Exceptionals | 0 | 0 | - |
| Profit/(Loss) for Year | 2,485 | 3,103 | -19.9% |
Performance
| Year to | 31 Mar 09 | 31 Mar 08 | Change |
|---|---|---|---|
| Operating Profit Margin | 14.8% | 21.3% | - |
| Pre-Tax Profit Margin | 15.5% | 22.1% | - |
| Return on Capital | 121.2% | 156.0% | - |
| Return on Assets | 38.6% | 61.7% | - |
| Dividend Paid (£000) | 2,500 | 2,500 | +00.0% |
| Turnover per employee | £227,235 | £226,213 | +0.5% |
| Pre-tax profit per employee | £35,245 | £50,079 | -29.6% |
Statistics
| Year to | 31 Mar 09 | 31 Mar 08 | Change |
|---|---|---|---|
| Staff employed (total) | 98 | 89 | +10.1% |
| Total Asset Value (£000) | 6,436 | 5,029 | +28.0% |
| Company Net Worth (£000) | 2,850 | 2,857 | -0.2% |
| Capital investment (£000) | 290 | 10 | +2800.0% |
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