Network Rail’s profits have been hit by the abolition of the industrial buildings allowance and falling property values.

In its interim results, the rail operator revealed a pre-tax profit of £706m in September, compared to £780m for the same period last year.

However Network Rail said that, due to the abolition of industrial buildings allowance, profit after tax was £5 million compared with £591 million in the same period in 2007.

Its statement showed it had paid out £512m because of the ‘abolition of industrial buildings allowance.’

Its property portfolio also declined by £83m, down to £866m from £949m at 31 March 2008. It also revealed net debts of £20bn.

Chief executive Iain Coucher said: ‘Network Rail continues to improve the railway for passengers and freight with record levels of train punctuality and continued high levels of investment. Once again, the company has delivered train performance ahead of forecast while running a safe and financially efficient railway.

‘Going forward, our twin aims are even better on time performance and increasing railway capacity so that passengers and freight users benefit from longer, more frequent trains and better stations and information.’