No stopping Stagecoach as rail revamp lifts it 13pc
PLANS to overhaul Britain’s rail network sent shares in Stagecoach surging full steam ahead.
Investors were buoyed by news the transport operator could rehash its arrangement under the East Coast franchise, which has so far failed to generate the sales and profits hoped for since 2014.
The Department for Transport will introduce an ‘East Coast Partnership’ – a joint venture between the public and private sector from 2020. It is in talks with the Stagecoach-Virgin Group partnership – which runs the existing East Coast franchise under Virgin Trains East Coast – to smooth the transition to the new model over the next two years.
Stagecoach said the plans, which include the possibility of restoring services cut in the 60s and 70s, will result in changes to its franchises.
It expects to reach an agreement to operate the franchise through to 2020. The move was given a vote of confidence by analysts at Liberum, who upgraded Stagecoach’s stock to ‘buy’ from ‘hold’.
Martin Griffiths, Stagecoach chief executive, said: ‘ We are excited by the potential to be a trailblazer for a new regional partnership railway on East Coast.’
Shares rose 13.1pc, or 20.9p, to 180.8p while rival First Group was up 3.5pc, or 3.7p, at 110.3p.
After the market shut, the London Stock Exchange confirmed its final reshuffle of the year.
Medical products firm ConvaTec, Thorpe Park owner Merlin and engineer Babcock were relegated from the FTSE 100 and replaced by takeaway firm Just Eat, packaging company DS Smith and safety products producer Halma.
The FTSE 100 fell 0.9pc, or 67.09 points, to 7393.56 points while the
FTSE 250 finished up 0.2pc, or 33.39 points, at 20059.58.
Reports that Britain has reached an agreement with the European Union over the Brexit ‘divorce bill’ gave firms with a focus on the domestic economy a boost.
Housebuilders Berkeley, Barratt
Developments and Persimmon rose 2pc, 2.4pc, and 2pc respectively. Retail stocks also made gains, with Kingfisher, Marks and
Spencer and Next rising 4.2pc, 3.8pc and 4.4pc respectively as they welcomed signs of progress.
Reports suggest the UK has agreed to pay up to £44bn to leave the EU – paving the way for talks to begin on a trade agreement. But the pound’s sharp rally hurt miners and companies that make the bulk of earnings overseas.
Randgold Resources finished down 6pc, or 440p, at 6915p while
British American Tobacco fell 3.4pc, or 167p, to 4802p.
Imperial Brands also suffered, after a double blow following the collapse of its supplier Palmer & Harvey. Markets responded to news the collapse would cause a one- off hit to profits of up to £160m, and sent shares slumping 2.9pc, or 91p, to 3046p.
Booming sales across its Express Gifts division lifted online retailer and school equipment supplier
Findel back into the black. The firm, which has Sports Direct’s Mike Ashley as a top shareholder, boasted a profit of £8.1m in the six months to September 29 compared to a loss of £600,000 in the same period the year before. Sales increased 6.1pc to £226m and shares jumped 34pc, or 52p, to 205p as a result.
Car retailer Motorpoint soared 5.8pc, or 10p, to 182p after it reported a 304pc jump in half-year profits to £9.7m, and an 18pc jump in half-year sales to £483.2m.
Ocado reaped the benefit of its tie- up with France’s Groupe Casino. Shares are up nearly 50pc since rumours of a link began on Monday, and rose 16.2pc, or 50p, to 359.6p yesterday.