National Express warns on profits

Transport group National Express has warned that its full-year profits are set to fall below expectations.

The firm, which has been at the centre of bid speculation, said it had been hit by higher interest costs and lower profits at its North American business.

It also said it was continuing to evaluate a merger proposal put forward by rival Stagecoach.

Last week, a group led by its largest shareholder, Spain's Cosmen family, withdrew a £765m takeover offer.

National Express also said that it intended to raise funds by issuing more shares by the end of the year.

Franchise hand-back

National Express said that in the three months to 30 September, trading conditions had remained "difficult", with revenue slowing in a "challenging economic environment".

Total group revenue was down 1% from the same period last year, the firm said.

However, its continuing operations in the UK and Spain were performing "resiliently".

In the UK, National Express operates bus and coach services, and also the East Anglia and c2c rail franchises.

It currently also operates the East Coast Main Line franchise. However, the firm said it was continuing discussions with the government over handing back this franchise.

Earlier this year, the government said it would be taking the East Coast franchise into state ownership after National Express asked for its contract to be renegotiated.