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Network Rail profit hits £1bn but punctuality target missed

Network Rail made a profit of £1.035bn in the last financial year to March 31, a significant increase from the £747m restated profit in 2013.

The increase in profit after tax, according to the company, is mainly as a result of accounting gains on hedging instruments of £304m (2012/13: £43m loss) and a tax credit of £221m (2012/13: charge of £70m).

However, during this same period, the company failed to meet its punctuality targets. Over the year, 90% of train services ran to time – 2.5 percentage points below the regulatory target.

The company stated that 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.

Revenue rose to £6.3bn from £6.1bn a year earlier, said Network Rail, adding that its profits would be re-invested in the rail network, which is undergoing a “renaissance”.

Mark Carne, chief executive, said: “We are in the middle of a rail renaissance, with record levels of passenger numbers and record levels of investment. This flourishing sector is investing heavily to improve the railway for today and for tomorrow.

“With a million more trains on the network than 10 years ago, there are inevitable challenges - we are determined to do more to improve train reliability in the face of these challenges. We will increase the reliability of the network and make it more resilient to climate change.”

Almost £7bn was invested in improving and expanding Britain’s rail network over the last 12 months, equating to almost £20m a day – providing new stations, platforms, lifts, information systems, concourses, footbridges and track.

Over the same 12-month period, the number of people travelling by rail grew by 86m, meaning passenger numbers have now doubled since 1995 with a further 30% growth predicted over the next 10 years.

Net debt at the year-end for Network Rail was £32.987bn, up from £30.358bn in 2013, with a gearing ratio of 65%. However, this is within the regulator’s 75% limit.

Patrick Butcher, group finance director, stated that Network Rail’s 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”.

(Image: c. Jonathan Brady/PA)

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