Sunny outlook for Stagecoach despite impact of snow chaos

The group reported a 44 per cent surge in half-year underlying pre-tax profits to 108.7m in the six months to the end of October as revenues lifted five per cent to 1.13bn.

The group, which runs major city bus operations in cities including Sheffield and Hull, as well as Sheffield Supertram, recently re-entered the London bus market after buying the East London Bus Group. It said like-for-like revenues across its bus business rose 2.3 per cent.

Stagecoach said it had seen an increase in bus passenger volumes despite "modest" hikes in fares. It signalled passengers could face fare rises in the coming years as it battles against Government funding cuts and expected fuel cost increases.

Chief executive Brian Souter said: "These are a strong set of results and we are encouraged by the increased demand for our services in the UK and North America. Our focus on value-for-money bus and rail travel and targeting organic growth has been the right strategy for the right time, benefitting our customers and our shareholders."

Stagecoach made a good start to the second half despite recent disruption from the snow. The group, which runs South West Trains and East Midlands Trains, said there would be a "relatively small" revenue hit across bus and rail businesses.

Rail business increased like-for-like revenues by 6.4 per cent, excluding tram business. Stagecoach said this division should deliver good operating profit for the current year, although its profitability will fall in subsequent years unless it wins new franchises.