M6toll motorway operator Midlands Expressway has turned a profit for the first time since opening in 2003, partly aided by a rise in HGV and delivery vehicle volumes, following the end of the pandemic lockdowns.
Midland Expressway operates the 27-mile M6toll motorway under a 53-year concession agreement with the government. Launched in 2001 and opened in December 2003 it runs until 2054.
Reporting its results to 31 December 2022, the operator revealed a pre-tax profit of £6.3m, rising from a pre-tax loss of £22m in 2021.
The company attributed the rise to increased traffic levels which rose by 30% to 17 million vehicles in the year (2021: 13 million), reflecting an average daily rate of 46,715 vehicles (2021: 35,843).
Total operating income rose to £110.8m (2021: £79.9m) which Midlands Express attributed to higher toll revenues driven by increased traffic volumes, particularly HGVs, delivery vehicles, and "staycation" traffic.
Increased user charges and a rise in the use of the service areas post-Covid also played their parts. in driving revenue.
Even in pre-pandemic times, Midlands Expressway has not seen such a volume of traffic. In 2019 the company reported a pre-tax loss of £10.5m, whilst its operating income stood at £92.8m. Traffic volumes also fell in 2019 to16.8 million vehicles from 18 million the year before.
Midlands Expressway said development of the HGV and van market had made good progress in 2022 under a “segmented market growth strategy”, aided by a strong business development and key account management team, which led to new usage from existing accounts and new account openings.
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It also pointed to the development of ANPR trials offering frictionless journeys linked to online payments as another factor driving its improved performance in 2022.
Capital expenditure rose in the period to £9.8m (2021: £1.6m), which the operator said was invested in ongoing maintenance, and road enhancements, with the lion’s share going towards its RoadAhead transformation programme.
The programme is developing a new tolling system supported by ANPR technology and an improved online offering for customers.
Turning to 2023, the company said that despite the impact of the pandemic and the Russian invasion of Ukraine and its effect in inflation and interest rates, traffic trends “appear to show an enduring growth to pre-pandemic levels and beyond.”
Commenting on the results, Michael Whelan, Midland Expressway general manager, said: "Since the pandemic, M6toll traffic volumes have exceeded pre-Covid 19 levels, with the recovery in particular boosted by HGV traffic, delivery and logistics businesses and increased staycationer traffic.
"The consistent rise in HGV traffic volumes on the M6toll during the past three and half years is a good case in point of the increasing confidence shown by regional companies and operators to use the M6toll road as their route of choice.
"Despite periods of huge uncertainty, including the current cost of living crisis, hauliers, logistics companies and other commercial operators have continued to place their faith in the M6toll as a route that can deliver operational benefits for their business.
“We are pleased to have taken over 50,000 daily journeys away from the M6 and local A roads in the Midlands, with the M6toll benefitting the region's motorists with reduced journey times and easing congestion on the local road network and long-distance routes."
He added: "As we move forward, we continue to focus on multimillion re-investment in technology, infrastructure, safety and customer convenience at the M6toll in order to deliver a safe, free-flowing and hassle-free alternative to the M6 and other congested routes in the regional network."
