Liverpool city region train operator Merseyrail is reporting record pre-tax profits of £43.9m, giving its shareholders a bumper dividends payout of just over £42m. Tony McDonough reports
Train operator Merseyrail is reporting record pre-tax profits of £43.9m for the 12 months to January 6, 2024 leading to a bumper payout to shareholders.
This is significantly higher than the £15.1m reported for the previous year. This year’s profits were boosted by an extra £15m covering previous underpayments under its 25-year contract with Liverpool City Region Combined Authority.
These underpayments were disputed so both sides agreed to independent arbitration and the arbitrator sided with Merseyrail. This led to two payments during the year of £14.3m and £700,000.
These figures are in Merseyrail’s annual report which was published on Companies House on Wednesday morning. They also show a turnover (excluding the one-off payments) of £209.9m – 13% higher than last year.
Known as Merseyrail Electrics 2002, the company has two shareholders – Serco Group and Transport UK. The latter business was created in August 2022 following a UK-led management buyout of Abellio, the overseas division of Netherlands Railways.
It means Transport UK is currently the 50:50 joint venture partner of Serco in Merseyrail Electrics 2002. Its 25-year franchise to operate the network runs until 2028. These latest results will see dividends of just over £42m paid to shareholders.
In the report finance director Christopher Maher said that even excluding the one-off payments underlying profits at Merseyrail were “exceptionally strong” with the network enjoying a post-COVID surge in passenger numbers.
An average of 78,000 passenger journeys were made each day with a total of 28m passenger journeys across the year. Passenger numbers were boosted by events such as Eurovision and the Open Golf Championship, as well as the usual Grand National crowds.
2023 also saw the long-awaited full roll-out of the new 777 train fleet on the network. The Combined Authority purchased the 52-strong fleet from Swiss manufacturer Stadler for £500m.
While the implementation of the new trains has gone smoothly for the most part Merseyrail did suffer multiple delays and cancellations on services to and from the new Headbolt Lane station on the Kirkby Line.
The one-mile line extension was not electrified and instead the 777 trains were fitted with batteries. There were initial teething problems with the units leading to significant disruptions to passengers.
Mr Maher said: “Merseyrail is working closely with our partners at Merseytravel and Stadler UK to improve the efficiency of the fleet which will in turn enhance the journey for our passengers using this line.”
Merseyrail, along with the Combined Authority, is committed to modernising its ticketing and payment system over the next one to three years. This will mean passengers will be able to tap their bank cards and phones at barriers, similar to the London Underground.
These latest accounts show Merseyrail employed 1,182 people during the year. Directors’ remuneration, including salaries and pensions, totalled £796,000 with the highest-paid director receiving £350,000.
“The directors are exceptionally pleased with both the overall and underlying performance of the business in the year,” added Mr Maher.
“Recovery (from the pandemic) continues to be strong and the positive performance has enabled the business to invest in both its customers and employees.”