Loss of East Coast mainline hits Stagecoach

'‹Transport giant Stagecoach has revealed an £8'‹6m hit after being stripped of the East Coast mainline franchise by the Government.

Stagecoach ran the East Coast mainline as a joint venture with Virgin

​​The East Coast mainline​, which links Yorkshire to London and Scotland,​ was taken back into public control by the Government on Sunday after Stagecoach and Virgin failed to achieve revenue targets.​

Stagecoach, which ran the line as a joint venture with Virgin, said it was "disappointed" by the costs of the failed franchise.

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Details of the financial impact of losing the franchise came as Stagecoach reported a 4​ per cent​ fall in underlying pre-tax profits to £144.8​m for the year to April 28.

Martin Griffiths, chief executive of Stagecoach, said: "I am disappointed to be reporting significant exceptional costs in respect of Virgin Trains East Coast but I am pleased that there is now clarity for both customers and shareholders.

"We have made significant progress elsewhere in our rail portfolio and continue to see value and opportunities.

"We welcome the positive changes by the Department for Transport to ensure a more balanced share of revenue risk between the Department and UK train operators.

"We are continuing work on bids for new South Eastern, West Coast Partnership and East Midlands rail franchises and we will maintain a disciplined approach to all rail bids."