Train firm hits new low after East Coast line losses

Rail and bus operator Stagecoach Group plunged to its lowest value in more than seven years yesterday after revealing an 83pc drop in annual profits thanks to its loss-making East Coast line.

Stagecoach saw £72.3m wiped off its value after reporting that profits had fallen from £104.4m in 2016 to £17.9m in the year ending april 29, despite revenues rising from £3.87bn to £3.94bn.

This was the result of the firm choosing to take an £84.1m charge to account for losses it thinks it will suffer on its Virgin Trains East Coast division over the next two years. There was also a separate £44.8m accounting charge related to the line.

Chief executive Martin Griffiths said revenue growth and infrastructure improvements have not met the expectations it held when bidding for a 90pc stake in the franchise in 2014.

it put this down to recent economic weakness, political uncertainty and terrorism concerns. Stagecoach is talking to the Government about changing the franchise terms, hoping to make it profitable by 2019. Shares finished down 6.2pc, or 12.6p, to 191.1p and Griffiths’s wife anne took advantage of that to buy nearly £30,000 worth of shares in the firm.

Shares in Petra Diamonds also failed to sparkle as the firm hit its lowest value in more than 12 months after it issued a profit warning just days before the end of its financial year.

The diamond miner, which has produced stones for the Queen’s Crown Jewels, fell by as much as 10.1pc in morning trading after it said an expansion of its mines was taking longer than expected.

as a result, Petra said revenue is likely to be nearly 10pc below market expectations while full-year results could also fall short. Shares dropped 8.7pc, or 9.9p, to 103.5p.

The FTSE 100 spent another day in the red, falling 0.63pc, or 46.56 points, to 7387.80.

it was hit by a strengthening of the pound after the Bank of England governor Mark Carney said debate around a potential hike in UK interest rates will build in coming months.

UK indexes were also hampered by a sell-off of technology stocks after several ransomware attacks brought down a number of company computer systems earlier this week. Micro Focus – the UK’s biggest listed software firm – fell 1.9pc, or 45p, to 2375p, while payroll software firm Sage fell 1.3pc, or 9p, to 702.5p, and cyber security company Sophos Group was off 5.9pc, or 27.8p, to 443.2p. International Consolidated

Airlines Group was among the biggest winners after its Spanish airline iberia bought 20 new airbus planes, to be used for short and medium-length flights. They will be delivered between 2018 and 2021.

IAG has reportedly negotiated a significant discount for the craft from their catalogue value of £1.4bn. Shares rose 3.9pc, or 23.5p, to 630p. Property and construction firm Kier Group rose after it said a simplification of the business following its acquisition of infrastructure firm Mouchel in 2015 is near completion.

Kier said the restructuring will save it cash which it can use to support future growth. Shares rose 1.8pc, or 22p, to 1240p.

TBC Bank was one of the FTSE 350’s biggest losers after financier Societe Generale sold off its entire stake in the Georgian bank.

The 2.8m shares were acquired by institutional investors from the UK, US and Europe. But shares fell 4.9pc, or 80p, to 1552p.