Stagecoach investing £44m in megabus coaches

More than 100 coaches have been ordered from Belgian manufacturer Van Hool for the budget travel service.

The coaches, which will be delivered in the next two months will operate on operate on the London- Sheffield-Leeds-Newcastle, London to Bristol and London to Cardiff routes. They will replace 15-metre single deck vehicles currently used on most of these journeys.

The announcement came as Stagecoach reported a bigger-than-expected drop in first-half profit hurt by losses at its East Midlands rail franchise.

The bus and rail operator said pre-tax profit fell 18 per cent to £88.7m.

Sales in the six months to end-October rose 14 per cent to £1.29bn, also below estimates of £1.37bn.

The results were hurt by a weak performance at the company’s UK Rail division, which swung to an operating loss of £6.9m from a profit of £22.9m last year.

“This was due to losses incurred at East Midlands Trains where revenue remains below the level forecast when the contract was originally awarded,” Stagecoach said today.

However, the company expects a stronger second-half, with East Midlands seen returning to profitability.

Shares closed at 248.6 pence last night, valuing the business at about £1.4bn.