Hucknall and Bulwell tram operator still feeling effects of pandemic as financial recovery begins

However, following the recent successful financial restructuring project in partnership with the Department for Transport (DfT) 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 March 31, 2023 which showed that the company had reported a £57m 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 £4.9m in the previous year, before taking into account Covid relief grants from central Government and exceptional fixed asset impairment charges.

However, 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, Tramlink chief executive, 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 per cent 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.

"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.”

Tramlink also reported that, as part of the recent two-year financial restructuring project, it has successfully negotiated with its senior and junior lenders to revise the terms of its loans to ensure the business remains a going concern.

Mr Hesketh added: “It’s been a challenging few years and we’d like to thank the city council and DfT 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.

Last year, as part of its efforts to crack down on fare evasion, NET also launched a zero tolerance campaign on fare dodgers.

NET says while it remains committed to providing cost-effective and sustainable public transport for all, its ability to do so will be affected by the level of Government support provided to public transport.