UK: Bus demand boosts Stagecoach
11:08 26 August 2014
Stagecoach said more people got on board its buses this summer as the transport giant posted a 4% rise in revenues from regional services.
The Perth-based company, which has operations in the UK and North America, reported a 0.9% rise in bus passenger volumes outside London in the 12 weeks to July 20.
Across the group, Stagecoach described overall trading as satisfactory after revenues from UK rail operations including South West Trains and East Midlands Trains rose 4.9%. Its North America division posted the same rate of growth amid the continued expansion of its megabus.com service.
Around 2.8 million passenger journeys are currently made on Stagecoach buses each day, including in Liverpool, Newcastle, Hull and Manchester.
It recently placed orders worth more than £90 million on new greener buses for 2014/15, with the company highlighting its confidence in “continuing to get people out of their cars and back on board the bus”.
Stagecoach said revenues earned directly from fare-paying passengers contributed most to the bus division’s 4% growth rate, with concessionary, contract, tendered and school revenues also continuing to grow despite efforts by local authorities to minimise concessionary reimbursements.
Stagecoach’s other UK operations include budget coach service megabus and the rail networks South West Trains, Island Line and East Midlands Trains. It has a 49% shareholding in Virgin Rail, which runs the West Coast franchise.
In North America, Stagecoach operates around 2,400 buses and coaches.
Stagecoach recently failed to secure the new Thameslink, Southern and Great Northern rail franchise, but this was offset by the award of a new West Coast franchise until 2017.
The company is in discussions with the Department for Transport over extensions to its South West and East Midlands franchises, although a decision is not expected until after the General Election.
Shares opened slightly higher following the trading update today.
Stagecoach said: “Although there are a number of challenges to growing profit in the year ending 30 April 2015, overall current trading is satisfactory and we remain on course to meet our expectations for the year.”