Stagecoach profits remain on track

Bus and rail group Stagecoach said its profit performance remained on track after sales motored ahead in all its divisions.

The Perth-based transport firm said like-for-like revenues in its UK rail arm, which runs the South West Trains commuter franchise and East Midlands Trains, grew six per cent in the 48 weeks to April 3.

Virgin Rail, in which it owns a 49 per cent stake, notched up sales growth of 12.1 per cent.

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Like-for-like revenues at its UK bus division – which operates in cities including Hull, Liverpool, Newcastle, and Manchester – rose 2.2 per cent in the 48 week period, which is a slight improvement on the 1.9 per cent up to February.

Stagecoach’s North American operation, including Megabus.com, posted an 8.3 per cent rise in underlying revenues in the 11 months to March 31.

“The overall profitability of the group has remained strong, with good ongoing cost control and all divisions showing revenue growth in the current year,” said the firm.

Analysts at Panmure Gordon said: “Current trading is good and we remain positive on the near and medium term outlook.”

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Stagecoach shares have risen 12 per cent in the past month, helped by being shortlisted for the Greater Anglia and Intercity West Coast rail franchises.

It has also been mooted as a possible merger partner for rival National Express, which is facing calls from its biggest shareholder to look at potential tie-ups.

American hedge fund Elliott, which owns 17.5 per cent of National, wants the bus and coach operator to merge with a UK counterpart such as Stagecoach.