Directly Operated Railways Limited, the company established in July 2009 and wholly owned by the Secretary of State for Transport, has published its second Annual Report and Financial Statements, for the period from 1 April 2010 to 31 March 2011.
The figures include the results for the Company’s subsidiary, East Coast Main Line Company Limited (East Coast).
Turnover for the year to 31 March 2011 amounted to £645.5 million (2009/10: £233.8 million), mainly reflecting ticket revenue earned from passenger services at East Coast and associated income earned from catering, car parks and commission from the sale of tickets on other train operators’ services.
Operating expenditure in the period amounted to £641.3 million (2009/10: £232.3 million), comprising access charges payable to Network Rail for stations and depots, rolling stock leasing costs, staff and other operating costs.
This generated an operating profit before Department of Transport service payments and taxation, of £182.8 million (2009/11: £52.7 million), and an operating profit after DfT service payments before taxation of £6.5 million (2010/11: £1.8 million).
The company exists to manage Train Operating Companies that are returned to temporary public ownership.
It is currently anticipated that the East Coast franchise will be re-let again to a private operator at the end of 2013.
Commenting on the results, Elaine Holt, Chairman and Chief Executive of Directly Operated Railways, and Chairman of East Coast, said:
“Our financial performance remains strong – and we continue to exceed our targets.
“As a consequence of our good fiscal management of the business we’ve subsequently been able to pay back more money to the Government through higher ‘premia’ payments.
“During the year, we made significant progress with the business turnaround, and towards preparations for the major timetable change, introduced after the year-end on 22 May.
“Despite this representing the biggest change on the East Coast Main Line in 20 years – in the making by the industry for more than 10 years – the new timetable was introduced seamlessly by East Coast.
“A major decision during the year was to re-launch the business with a new First Class complimentary food and drinks offer, also introduced after the year-end on 22 May.
“Whilst there still remain some inconsistencies, the new product has been overwhelmingly welcomed by our customers, and we’re working hard to deliver a good service on every train.”
The new product has, as anticipated, prompted a major surge in First Class journeys.
The number of First Class journeys made with East Coast has increased by 24% since the new timetable and First Class Complimentary service were launched on 22 May.
This represents an additional 74,000 First Class journeys, compared with the same period last year.
In the four weeks to 23 July 2011, 173,000 passenger journeys were made in First Class – a rise of 29%, or 39,000 journeys, compared with the corresponding four weeks in 2010.
The rise is the biggest seen on the East Coast route in the last five years, and one of the biggest since the end of British Rail in 1996.
More long-distance travellers are also switching from planes to East Coast trains.
Figures from the Association of Train Operating Companies (ATOC) show that in the last five years, East Coast’s market share on the Edinburgh to London route grew by 6% to 27% last year; while its share on the Newcastle to London route grew by 5% to 64% last year.
During 2010/11, 18.5 million passenger journeys were made with East Coast, which represents a 3% increase on the previous year.
The flagship Anglo-Scots services have seen a 13 per cent increase in passenger growth, whilst the West Yorkshire/ London services, East Coast’s busiest market, achieved 4% growth.
Sickness absence days per employee have further reduced from an average of over 14 days in November 2009, to just under 9.5 days at the year-end in March 2011, a reduction of some 50% – indicating that the pride is returning among East Coast staff.
“Operational performance remains the number one challenge for East Coast”, says Elaine Holt.
“We continue to work closely with Network Rail to create improvement, as their infrastructure failures also have a direct and considerable impact on the ability of East Coast to deliver to target.”
Four-fifths of all delays are a direct result of external factors, outside of the control of East Coast.
Elaine Holt concludes: “Whilst we’re making good progress with the turnaround, we have much still to do.
“During this year, we shall continue to focus on delivering a consistent service across our network, working harder to ensure we get the basics right, fixing the problems we inherited, improving and building for the future – and restoring the pride in the East Coast railway.”