Stagecoach drives off US effect

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Transport operator Stagecoach said strong growth at its UK bus and rail businesses will make up for weather-related disruption and rising costs at its North American unit.

The company said recent extreme weather in parts of the US and the costs of building its business in the competitive North American intercity coach market led it to lower short-term operating profit expectations for the US division.

However, Stagecoach said the impact of the US problems has been largely offset at group level by good trading across its UK businesses and lower than expected finance charges.

The UK regional bus division reported a 3.8 per cent uplift in underlying sales in the 40 weeks to February 3, while its London bus business posted revenues up 1.5 per cent after a recent restructuring drive.

The group’s UK rail business reported a 6.6 per cent rise in sales during the period, while Virgin Rail, which Stagecoach operates with Richard Branson’s Virgin Group, delivered a 3.3 per cent sales rise.

Its North American bus business, which includes yellow school bus services and Megabus, grew sales by 10.4 per cent in the nine months to the end of January, despite severe storms in the north east of the US.

The company said the overall profitability of the group is good and there has been no significant change to its profit expectations for the year to the end of April.

Stagecoach is expected to report annual pre-tax profits of £210m.

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