Network Rail has reported a drop in revenue and profits for the financial year 2009-10.

Network Rail (NR) has revealed its 2009-10 financial results, with profits and revenue significantly down, although it delivered a record year with train punctuality surpassing 91%.

Revenue was down 8% to £5,668 million, pre-tax profits were down to £395m from more than £1.52bn last year, and after-tax profits totalled £284m – significantly less than the previous year’s figure of £609m.

Yet NR maintains that its costs have been controlled, and its debt to gearing ratio of 64% is at a sustainable level. It also stated that its strong financial performance means that solid profits have been reinvested in the railway, to reduce its running costs.

Iain Coucher, Chief Executive, said: “Network Rail has a duty to get best value for the British people and we have retained a tight focus on controlling costs. This has meant that we can cut charges to passenger and freight operators. As a result, the savings we make could be passed on to passengers in lower fares or to taxpayers through lower government subsidies to the rail industry.”

However, the Office of Rail Regulation (ORR) announced that NR’s performance during the last year “had been mixed.”

Bill Emery, ORR Chief Executive, said: “There are some positives, such as regional train performance, passenger safety generally has been good and there has been some success with level crossings… However, there are areas of concern, most notably Network Rail’s asset management policies for structures such as bridges and viaducts, and we are not yet convinced of the efficiency gains the company is claiming.

“Although passenger safety has generally been good, we cannot forget that during the past year, three railway workers lost their lives, reminding us all that there is simply no room for complacency in health and safety.”

ORR’s assessment of NR’s performance formed the basis of its advice to the NR remuneration committee to inform their decisions on senior management bonuses – NR has to give clear reasons and evidence for any bonuses it bestows, given the current economic situation and the company’s “mixed performance”.

Coucher summed up NR’s future plans: “In a more austere spending environment it is vital that Network Rail continues to drive down costs and make further efficiency savings. A strong start has been made in 2009/10 in delivering against our targets but we must and we will work harder and faster in the coming years.”