Profits in the UK bus industry rose for the second consecutive year in 2014/15, according to new analysis published by the Passenger Transport Monitor website. The 122-page report Bus Industry Performance 2016 presents the results of its annual analysis of 116 local bus companies around Great Britain, in the 25th year of the Bus Industry Monitor project.

Revenue grew by 3.8% at a time when inflation was running at around 1%. Operating costs rose by 2.8%. 

Turnover across the companies analysed rose to £5,708m, whilst operating costs reached £5,275m. Operating profit was £433m, up by 17.3% from last year’s £369m. Operating margins recovered to 7.6%, up from 6.7% in the previous year, and 6.2% in the year before that.

Companies outside London saw a smaller 1.4% increase in turnover, taking the total to £3,798m, whilst the rise in operating costs was restricted to 0.5% to £3,477m. Operating profit was 12.7% higher at £321m, and operating margins improved to 8.5% (2013/14: 7.6%, 2012/13: 7.2%, 2011/12: 8.8%).

At the same time, the report provides an updated estimate of the levels of profits which operators need in order to meet their financial obligations and invest for the future. The modelling work suggests that the required margins outside London are between 10% and 12% - well above the levels currently being earned.
Commenting on the report, editor Chris Cheek said: "It's good news that, despite all the cuts in public spending and other pressures on the industry, the financial situation seems to have been stabilised in 2014/15. This enabled companies to deliver record-breaking capital investment of £432m in new cleaner vehicles and other equipment during the year."