News Column

Stagecoach earnings rise after bus and train contract wins

August 27, 2014

Jennifer Rankin,

Stagecoach has reported a robust increase in earnings after winning a series of contracts to run London buses and operate the west coast mainline train service.

Stagecoach and its joint venture partner Virgin Trains were recently awarded the right to run the west coast mainline between London and Scotland until 2017 a deal that is expected to triple their profits.

Although still early days for the new franchise, which began on 22 June, Stagecoach said business had been strong.

It reported a 5% increase in quarterly revenues for its entire UK rail business on last year.

The Perth-based international transport group also benefited from winning two new bus contracts in London, adding to the services it runs in the south east of the capital. London bus revenues were up 14%, although the company said earnings were lower than expected because of traffic disruption caused by roadworks.

Stagecoach is one of the largest bus companies in the country and earnings from its fleet of 8,100 regional buses and coaches, which account for more than a quarter of its revenue, were up 4%.

The group, which runs no-frills coach service Megabus and Sheffield's super tram, reported that passenger numbers were up 0.9% over the quarter, bucking the trend of declining bus use outside London.

The company said its profitability remained satisfactory, a reassurance that lifted its share price 0.2% to 360 pence in early trading.

Stagecoach has teamed up with Virgin to bid for the east coast franchise, which is expected to be announced in November.

The London-to-Edinburgh route has been in public ownership since 2009, but is due to make a controversial return to private hands early next year.

Stagecoach is also one of three shortlisted bidders for the TransPennine Express rail franchise along with FirstGroup and Keolis, which currently run the service in a joint venture.

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Source: Guardian Web

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