News Column

Stagecoach Increases Dividend As Pretax Profit, Revenue Rise

June 25, 2014

Alice Attwood

LONDON (Alliance News) - Stagecoach PLC said Wednesday that revenue and profit rose in its full-year, boosted by orders for over GBP110 million of new greener buses for 2014/15 in its UK Bus division, its UK Rail New West Coast Trains franchise agreement and an 80% rise in operating profit in North America, leading to a 10% increase in its full-year dividend.

In its full-year results for the year to April 30, 2014, the public transport operator said pretax profit came in at GBP158.0 million, up from a restated GBP154.3 million last year. Revenue rose to GBP2.93 billion for the year, up from a restated GBP2.80 billion in 2013.

Stagecoach has increased its full-year dividend per share by 10.5% to 9.5 pence, up from the 8.6 pence paid the previous year as the company said current trading is in line with management expectations.

On a divisional basis, the company said the UK Bus business has performed well, recording orders for new greener buses in 2014/15 worth more than GBP110 million, and adding that new contract wins in London have been "driven by good cost control and operational performance."

The company said the UK Bus division (regional operations) saw operating profit rise to GBP147.4 million from a restated GBP143.2 million during the year, as revenue rose to GBP1.01 billion from GBP966.7 million.

UK Bus (London) operating profit rose to GBP23.9 million from GBP19.0 million last year, with revenues rising to GBP244.9 million from GBP232.7 million in 2013.

During the year the transport provider's UK Rail business agreed a new West Coast Trains franchise deal through its Virgin Rail Group joint venture, extended the South West Trains-Network Rail Alliance and said that GBP9 million has been invested in pursuing new rail franchise opportunities. UK Rail operating profit declined to GBP34.3 million from GBP41.2 million last year, while revenues rose to GBP1.25 billion from GBP1.20 billion in 2013.

The North America business records operating profit growth of more than 80% for the year, driven by its inter-city services, said Stagecoach. Operating profit rose to GBP23.7 million from a restated GBP13.4 million last year on revenue of GBP428.2 million, up from GBP407.2 million.

Looking ahead the FTSE 250-listed company said it will continue to develop its product and footprint and that it has been shortlisted for the InterCity East Coast rail franchise in partnership with Virgin, as well as a pipeline of other new rail opportunities in UK, and planned extensions or direct awards of South West and East Midlands rail franchises.

"We have met our expectations for the year," said Chief Executive Martin Griffiths. "Our growing business is continuing to expand and is leading a resurgence in good value, high quality inter-city travel options for people in the UK, mainland Europe and North America. In North America, in particular, we have significantly extended our footprint with new hubs, including in Florida. We believe there is a huge opportunity to encourage motorists to switch from the car, and our expansion plans are well on track. Our other wholly-owned operations in North America are performing satisfactorily and we are also pleased to have made progress in resolving the way forward for our Twin America sightseeing joint venture."

Stagecoach said current trading remains in line with expectations with Chairman Sir Brian Suter stating that the company has seen a satisfactory start to trading in the current financial year, resulting in the group being in "a strong financial position."

Shares in the FTSE 250-listed company were trading marginally lower in early trading, down 0.40% at 376 pence per share.

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Source: Alliance News

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