Virgin Trains breaks record for revenues

The group, which runs the London to Glasgow West Coast main line, saw revenues jump by 11 per cent to £753m in the year to March, prompting a payment of £110m to the Government under the terms of its franchise.

And the company’s joint owners, Stagecoach and Virgin Group, shared a £32.5m dividend.

As part of the franchise agreement, Virgin Trains pays the Government, or can receive a subsidy, if actual revenues exceed, or fall short, of those anticipated. Last year, it received a government subsidy of £20m.

Pre-tax profits dropped to £55.7m from £69.4m after the Government’s payment. After-tax profits also fell by 21 per cent to £39.9m, out of which £6.5m is being held back for investment.

Revenues are tipped to climb again in the current year as regulated fares will rise by eight per cent from January.

Where there is some discretion, such as in advance tickets, prices may rise by less, but the current year could see an even larger payment to the Government if “strong growth” comes through as expected.

As well as higher fares, Virgin Atlantic said it had picked up market share from airlines operating between Manchester/Glasgow and London.