Network Rail recorded a nominal profit of £1.256 billion for the 2013/14 financial year, compared with £677 million in 2012/13, the company has reported.
As nearly all funds come from either the Government or the fare payer, and most expenditure is tightly regulated, this is not profit in the usual sense. However, as all such money is reinvested in the railway, rather than being paid to shareholders, it does mean Network Rail has (in principle) more to spend in the coming months and years.
In 2013/14 capital expenditure was £6.873bn, compared with £5.050bn in 2012/13, contributing to an increased asset value of £49.833bn (£46.411bn last year). Revenue was £6.333bn, compared with £6.197bn in 2012/13.
NR says the increase in profit after tax is as a result of accounting gains on hedging instruments of £304m (£43m loss in 2012/13) and a tax credit of £221m (2012/13 charge of £70m). Operating profit was £2.001bn (£2.207bn last year).
Since 2012/13 net debt has risen from £30.358bn to £32.987bn. This gives gearing (debt to asset value) of 65% against the Office of Rail Regulation’s set limit of 75%.
NR is set punctuality targets by the ORR, and is fined if the targets are not met - even though many delays are beyond Network Rail’s control, such as weather, train failure and trespass.
Last year punctuality fell from a Public Performance Measure of 90.9% to 90%, against the target of 92.5%, and NR Group 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.
”Our determination cannot waver over the coming years, as we look to restore train punctuality to record high levels and wisely invest £38bn to improve and expand our railway for passengers and businesses across Britain.”
NR Chief Executive Mark Carne said: “While some of this shortfall was caused by congestion, as the railway witnessed growth of 5.7% in passenger journeys during the year, extreme weather and slower improvements in asset reliability also played a part.”
The company notes that compared with ten years ago there were a million additional train services in 2013/14, and double the number of passengers arrived on time.
Additionally, around 800 level crossings have been closed in the past four years, as the drive to increase safety continues. During Control Period 4 (April 2009-March 2014) over 2,000 miles of track were renewed, over 500 stations were improved (about 20% of the total), 200 lifts were installed at stations, and more than 140 platforms were lengthened.