Merseyrail Announces Record £43.9m Profits

Train operator Merseyrail has reported record pre-tax profits of £43.9 million for the 12 months leading up to January 6, 2024, resulting in a substantial payout to shareholders. This marks a significant jump from the £15.1 million reported the previous year.

The rise in profits was bolstered by an additional £15 million related to past underpayments under Merseyrail’s 25-year contract with the Liverpool City Region Combined Authority. These underpayments were resolved through independent arbitration, with the arbitrator ruling in favor of Merseyrail, leading to two payments totaling £15 million.

Merseyrail’s annual report, published on Companies House on Wednesday, also shows a turnover of £209.9 million (excluding the one-off payments), reflecting a 13% increase from the prior year. The company, officially known as Merseyrail Electrics 2002, has two shareholders—Serco Group and Transport UK. Transport UK became a partner following a management buyout of Abellio in 2022, making it a 50:50 joint venture partner with Serco. Merseyrail’s current franchise to operate the network runs until 2028. This year's strong financial performance will result in over £42 million in dividends being paid to shareholders.

Finance director Christopher Maher noted that even without the one-off payments, Merseyrail’s underlying profits were “exceptionally strong,” with the network seeing a post-COVID surge in passenger numbers. The operator averaged 78,000 passenger journeys per day, totaling 28 million journeys for the year. Events such as Eurovision, the Open Golf Championship, and the Grand National significantly contributed to this boost.

In 2023, Merseyrail also fully deployed its new fleet of 777 trains, a £500 million investment by the Combined Authority. While the roll-out went smoothly overall, some issues occurred on services to the new Headbolt Lane station on the Kirkby Line, which was fitted with battery-powered trains instead of an electrified extension. Initial technical problems with the new units led to delays and cancellations.

Mr. Maher said the company is working closely with Merseytravel and Stadler UK to enhance the performance of the fleet and improve service for passengers on the affected route. Merseyrail is also planning to modernize its ticketing and payment systems within the next few years, allowing passengers to use bank cards and mobile phones for contactless payments, similar to London’s Underground system.

Merseyrail employed 1,182 people during the year, with total directors’ remuneration amounting to £796,000, including £350,000 for the highest-paid director.

Mr. Maher expressed the directors' satisfaction with the company's performance, highlighting its continued strong recovery from the pandemic, which has enabled further investment in customers and employees.