National Express Transport Solutions (NETS) is to close the Clarkes of London depot at Sydenham in London and its base in Gillingham that came with purchase of The Kings Ferry, although no changes to those two respective brands are proposed “at present,” and work is expected to be moved to spare capacity elsewhere, parent Mobico Group has confirmed.
The news comes after Mobico said in a trading update for Q3 issued early on 12 October that underlying profitability of NETS is “currently below the levels required to meet our return threshold.” It noted that two of five key NETS depots were to close but did not name them. The remaining NETS business will undergo a continued review of its return potential, Mobico adds.
In a brief statement, a spokesperson for National Express says: “We continually review the profitability of our portfolio to ensure that we are set up to offer the very best products at the best prices in the market to our customers.
“To ensure that we can operate efficiently, we have made the difficult decision to close our depots in Sydenham and Gillingham. We will be entering a consultation period with colleagues and we will do all we can to support them through this process.
“We will continue to operate corporate and private hire work from our strong and efficient network of depots across the UK.”
Closure of the two depots comes after a period of change in National Express’s UK business. While the scheduled white coach operation is performing well and has seen a further increase in revenues in Q3, the Mobico subsidiary recently parted company with both UK and Germany CEO Tom Stables and National Express West Midlands (NXWM) Managing Director David Bradford.
During July, National Express also announced an end to its Touromo brand, which was introduced in January to capture day trips and holidays operated by NETS companies. Following news of Mr Bradford and Mr Stables’ departures, Alex Jensen was appointed CEO.
In its Q3 trading update, Mobico says that Ms Jensen has been involved in “a rapid assessment” of the National Express division. Identified as “clear areas for improvement” are better commercial scrutiny and ambition; tighter cost control and ownership of cost reduction initiatives; and improved allocation of capital and resources.
Mobico adds that a path to improved profitability has been hampered by higher costs, although a productivity and cost reduction programme is on track to deliver up to £30 million of annualised savings. Mobico is also preparing to dispose of its large school bus business in North America. Commencement of the sale process is expected “in early 2024.”
In the UK, National Express saw a 13% year-on-year revenue growth in Q3 on 2022’s figure. NXWM is currently seeing commercial bus patronage at 97% of 2019 levels.
