Just £6m left before National Express East Coast will be surrendered

National Express Group has warned that its profits are likely to be lower than expected this year. The warning comes in an Interim Management Statement, which has been published as discussion continues about a possible merger with Stagecoach Group.

A proposed takeover by a consortium led by the Spanish Cosmen family was scrapped on Friday 16 October, to be followed immediately by new overtures from Stagecoach, but these discussions are said to be at an early stage.

If a merger did go ahead, Stagecoach would be set to acquire both the c2c and East Anglia franchises, as well as the Midland Metro tram concession. NXG said East Anglia had met its performance targets, which should qualify it for a three-year franchise extension from April 2011. However, any extension of the contract will be subject to a formal review by the DfT next month.

Meanwhile National Express said that the surrender of the East Coast franchise is set to go ahead, as expected, before the end of the year. Of £40m which had been made available from the Group to support East Coast, just £6m is left.

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