Network Rail reveals £1.2bn profit

But the net debt for the not-for-dividend company, which has no shareholders, rose from £18.4 billion in 2006/07 to £19.7 billion in the 12 months ending March 2008, according to preliminary results. The after-tax profit figure for 2007/08 was up from £1 billion recorded in the previous 12 months.

NR said that during the last financial year train punctuality had reached its highest ever figure, with 89.9% of trains arriving on time. The company added that the figure for the 12 months ending April 2008 was now above 90%.

Turnover last year was £5.96 billion - an increase of £165 million on the previous year, while operating profit increased from £2.3 billion to £2.4 billion.

The delays on the network attributable to NR were reduced by one million minutes over the last year - a 10% cut on the previous year and the lowest level for a decade.

Announcing the results, NR chairman Sir Ian McAllister said: "Overall, the last year has been a good one for Network Rail and the industry as a whole, with passengers seeing a better service. Train performance is at an all-time high, a £4 billion investment programme has been delivered, delays caused by the infrastructure have been cut and costs have also been reduced."

NR's worst moment during the year was probably the engineering overruns at New Year which led to the company being fined a record £14 million by the Office of Rail Regulation (ORR).

Sir Ian said: "Lessons have been learned following the engineering overrun. Changes have been made to make the planning and execution of such big improvement schemes more robust. Alongside maintaining high levels of safety and train punctuality, we have continued to make savings, with the costs of running the railway seeing a further £178 million reduction in real terms this year."

The latest figures come a day after the ORR published draft proposals requiring NR to improve its efficiency and train punctuality within a financial framework which is more than £3 billion less than NR had asked for for the 2009-14 period. The ORR is also keen for NR to reduce weekend engineering work and the impact that has on passengers to a minimum.

NR has not yet said whether its executives would be receiving bonuses this year. These are dependent on the company's performance. Although it cannot control the bonuses, the ORR has written to the NR remuneration committee pointing out that performance in some aspects has failed during 2007/08.