New figures have revealed the ongoing impact of the pandemic on Nottingham Express Transit (NET), with passenger volumes still 20% less than pre-pandemic levels.
However, following the recent successful financial restructuring project in partnership with the Department for Transport and Nottingham City Council, Tramlink Nottingham Limited, which operates the NET concession, believes the network is in a much more stable and robust position for the coming financial year.
The figures were published in the annual accounts for the year to 31 March 2023 which showed that the company had reported a loss as a result of the impacted passenger numbers and high energy costs.
The year to March 2023 saw passenger journeys recover to 14.4m, compared to 9.1m in the prior year. The company also made a gross profit of £7.65m compared to £4.90m in the previous year, before taking into account COVID relief grants from central government and exceptional fixed asset impairment charges.
Total losses before tax and including interest charges were £57.1m compared to £20.4m for the prior year. This is due to an impairment charge of £26.7m to reduce the carrying value of fixed assets in line with revised expected net present value future cashflows over the remainder of the concession in the post-COVID business environment.
Tim Hesketh, CEO of Tramlink, said: “Like many other public transport operators, there’s no denying that we’re still feeling the effects of the pandemic. It’s promising to see that post-pandemic passenger levels are well on their way to recovery, with figures showing they’re at 80% of what they were before COVID.
“However, we remain committed to doing all we can to ensure the network can continue to provide a sustainable and convenient option for the thousands of people who rely on it for travel in and around the city. That’s why we believe the restructure was essential for helping us make some key improvements to our operations.
“It will not only give us a much more secure financial position, but it will also allow us to make a raft of investments into areas such as new technology, updates to our ticket systems and the recruitment of additional revenue protection officers.”
As part of the recent financial restructuring project, which took two years to complete, Tramlink Nottingham Limited has successfully negotiated with its senior and junior lenders to revise the terms of it loans. This will ensure the business remains a going concern and can continue to provide a high level of service to the travelling public of Nottinghamshire.
Tim added: “It’s been a challenging few years and we’d like to thank the City Council and Department of Transport for all their support. Thanks to the restructure, we look forward to a brighter year ahead for the network and the wider city.”
The concession which allows Tramlink to run the NET tram system runs until 2034 and factors in losses in the earlier years due to investments in the system, including expanding the network in 2015 and buying new tram vehicles.
The loss reported during this year’s accounts is in line with financial expectations.
