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Network Rail rakes in first profits
The firm that runs the UK’s railway tracks and signals, has made a profit for the first time. Figures from Network Rail for the half to September revealed profits of £747 million, versus losses of £108 million a year earlier, which the not-for-profit company will spend on improving the network. The company has taken more than £1 billion out of the cost of running the railway over the past 18 months. Now that it is making money, it expects to be able to start investing in its assets. Network Rail chairman Ian McAllister heralded improvements in punctuality, stating that ‘from being a basket case a few years ago, rail is now a success story.’ He is now looking to improve train punctuality, at its highest levels for seven years, above 90 per cent. To boost capacity, Network Rail, which replaced private firm Railtrack in 2002 and receives £4 billion a year in subsidy, is looking to run more trains, make them longer, and encourage people to travel outside of peak hours. The company, which has no shareholders, reinvests its profits into infrastructure. Companies that could benefit from an increase in rail investment include fully-listed engineering consultant Scott Wilson and AIM-listed construction services provider May Gurney. Elsewhere within the transport sector, commercial vehicle hire counter Northgate, the £799 million FTSE 250 stock market favourite, let no one down with a ruggedly assured pre-close update. First half trading was apparently satisfactory, with UK utilisation levels having increased to 91 per cent and modest fleet growth enjoyed, despite prevailing tough trading in the market place. And in Spain, strong demand for the product led to fleet growth and operating profits in-line with expectations. Interim figures to the end of October should accelerate home in early January.
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