Stagecoach still on track despite challenging trading environment
- Credit: Ally Carmichael/Newscast
Bus and train operator Stagecoach has confirmed a slowdown in revenue growth at its UK business since its first half results in December.
Stagecoach said today that its expectations for group earnings for the year to April 30 had “not signficantly changed” with revenue growth in the UK having eased so far duriing the second half, in line with trends reported at the half-year stage.
However, also as anticipated in December, the group said second half revenues from its North American business were benefiting from new contract wins.
Revenues from the group’s UK regional bus operations, which include services linking Bury St Edmunds, Newmarket, Haverhill and Saffron Walden with Cambridge, were 0.7% ahead on a like-for-like basis in the 40 weeks to February 6, compared with like-for-like growth of 1.3% on its London bus routes.
Like-for-like revenues at its UK rail business, which includes East Midland Trains and South West Trains, were 4.6% ahead during the period. The like-for-like comparison excludes the contribution of the new Virgin Trains East Coast franchise, in which Stagecoach has a 90% stake, which began on March 1 last year.
At the Virgin Rail Group joint venture, which operates on the West Coast main line and associated routes, and in which Stagecoach has a 49% stake, like-for-like revenues were 6.6% up.
And in North America, including the Megabus.com business, like-for-like revenues were 4.4% ahead, with this figure covering the nine months to January 31.
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Stagecoach said in today’s trading update: “Although we continue to operate in a more challenging environment, we remain on track to meet our expectations for the year.”
In its half-year results in December, Stagecoach revealed that it would not be taking its planned 40% stake in a joint bid with current operator Abellio for the new Greater Anglia rail franchise which is due to start in October.
Stagecoach said it had been “unable to reach an agreement with Abellio on elements of the proposed bid” and that, in view of other rail bidding opportunities expected over the next two years, it had “decided not to proceed with an equity participation in the bid”.
Abellio is pressing ahead with its bid and, in the event of it winning, Stagecoach has said it will still provide support and advice to the new franchise. Also on the shortlist of bidders with Abellio are FirstGroup and National Express.