Network Rail has reported a drop in profits and an increased level of debt in its annual results published today (3 June).

British railway company Network Rail has witnessed a significant drop in its annual profit to £1.52 billion before tax.

Network Rail has also seen its level of debt increase over the course of the year to 31 March 2009. It rose from £19.7bn to £22.3bn.

Despite the fall in profit and the rise in debt, Network Rail Chief Executive Ian Coucher said: “Network Rail has delivered a good set of results meeting or exceeding almost all its targets and those set by the Office of Rail Regulation (ORR).”

The ORR was less impressed with Network Rail’s annual results and stated that the British railway infrastructure operator had failed to meet some targets for efficiency. Bill Emery, ORR Chief Executive, said: “Network Rail’s performance over the past year has been mixed. While it has met many of its regulatory targets, it has missed others.

“Most notably it has failed to make the efficiency savings expected of it over the five year period to April 2009, and has fallen short of the levels of performance passengers and the industry expect.”

However, on a more positive note, train punctuality has hit an all time high of 90.6%.

In a statement, Mr Coucher concluded: “Network Rail has had a good year overall and there is always room for improvement. I am acutely aware that customers expect and deserve an ever improving rail service.

“Over the next five years our service will improve again as we embark upon an ambitious £35bn programme of work to deliver even higher levels of performance, reduce overcrowding and expand and grow the rail network.”

The ORR’s national rail review forms the basis of advice to the Network Rail Board’s remuneration committee with regards to senior management bonuses. In the review, the ORR has made it clear that given the current economic situation and Network Rail’s mixed performance, any decision on bonuses must be backed up by clear evidence of benefits brought to the rail network as a whole.