Slowing economic growth, Brexit vote and terrorism hit Stagecoach's UK rail division

Train and bus operator Stagecoach has said that slowing economic growth, the Brexit vote and terrorism have begun to take their toll on the company's UK rail division.

Stagecoach buses.

The group said revenue was also hit by poor weather, competition from airlines and lower petrol prices, meaning more people opted to drive than take public transport.

Stagecoach said: “Across all of our divisions, we have continued to see subdued revenue trends relative to the stronger growth we have delivered over the last 10 years or so.”

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In its rail division specifically, it added that, while it has exceeded profit targets, growth has slowed.

“UK GDP growth has slowed. There is evidence of weakening consumer and business confidence, and we see continuing uncertainty among consumers and businesses in the context of the UK’s decision to leave the European Union.

“Other factors such as increased terrorism concerns and poor weather have had some impact on revenue,” the firm said.

Stagecoach made the comments alongside its half-year results, which saw pre-tax profits fall 1.4 per cent to £89.5m. Revenue nudged up 1.6 per cent to £2bn.

But chief executive Martin Griffiths struck an upbeat tone, flagging a market opportunity for a shift from cars to public transport against a backdrop of “population growth, urbanisation, technological advancements, and increasing pressure to tackle road congestion and improve air quality”.

The company operates routes such as South West Trains, East Midlands Trains, Virgin Trains East Coast and Virgin Rail Group’s West Coast franchise.