UK rail division on the right track for Stagecoach

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Transport group Stagecoach said it had traded well in its first half due to a strong performance from its British rail and US bus businesses.

The Scotland-based company yesterday said like-for-like revenues at its British rail unit rose 7.9 per cent in the 24 weeks to October 14, while sales at its North America coach business, which includes Megabus, rose 10.7 per cent.

Its regional bus division in the UK reported a 3.6 per cent sales uplift during the period but its London bus business posted revenues down 0.9 per cent after it dropped some contracts as part of a restructuring drive.

Stagecoach said the overall profitability of the group had remained good, and that there had been no significant change to its annual pre-tax profit forecasts.

Virgin Rail, jointly owned by Stagecoach and Richard Branson’s Virgin Group, was last month stripped of the West Coast Mainline franchise, which runs from London to Scotland, after the Department for Transport (DfT) awarded the 13-year franchise to rival FirstGroup.

However, the DfT has since asked Virgin and Stagecoach to continue operating the service for up to 13 months from December, while it revamps the country’s rail franchising process.

“The group welcomes the opportunity to participate in these reviews where appropriate,” Stagecoach said.

“Overall current trading remains good and the prospects for the group remain positive.”

Stagecoach, which transports some 2.5 million passengers a day, is also shortlisted for the Greater Western and Thameslink rail franchises.

The company said a review into its Twin America joint venture, formed by Stagecoach North America and City Sights in 2009, by the US Department of Justice and the New York Attorney General’s Office would likely be completed soon.

Meanwhile, Stagecoach has introduced greener fuel on more than 900 vehicles in its Scottish bus fleet as part of a drive to cut its CO2 emissions.

A new mix of fuel will be used by 530 buses and coaches across its East Scotland business and almost 400 vehicles at Stagecoach West Scotland.

The new fuel blend uses a mix of 30 per cent biofuel and 70 per cent standard diesel. The transport group said buses in both areas previously used a mix of 5 per cent biofuel and 95 per cent diesel.

The new fuel is expected to cut CO2 emissions from the vehicles by up to 22 per cent. The group said it had reduced carbon emissions relative to the turnover of its UK businesses by 5.6 per cent in the two years to April 30, 2011.