Stagecoach sales hit by the Beast from the East

Trading update reveals the impact of bad weather on the Perth company

The Beast from the East has landed a sales blow on Perth-based bus company Stagecoach.

In a trading update yesterday, the group said like-for-like revenue growth at the regional bus arm fell 2.5% for the latest four-week period following the snow disruption in February and March.

It is a further blow for the firm whose shares have lost 22% of their value since the start of the year.

Excluding the most recent four-week period, like-for-like revenue growth for the 40 weeks ended February 3 was 0.1%.

Despite the sales hit, Stagecoach said it was on track for annual earnings targets, with revenues at UK Rail and Virgin Rail growing 3.2% and 2.8%, respectively, for the 44-week period.

It added that a revenue decrease for its London division was in line with expectations as it reflects the impact of contracts lost in the prior year.

Revenue in North America was lower than in the first half of the financial year, which the firm said “reflected the timing of contract work” and more severe weather.

Sales in the division dropped by 0.6%, including a 4.6% decline for megabus. com in North America.

Stagecoach, which has come under fire for its handling of the East Coast Mainline, said it had submitted a bid for the South Eastern franchise and was still locked in talks with the Department of Transport over new contract terms for the Virgin Trains East Coast business.

It said bids for the East Midlands and West Coast Partnership franchises were “progressing”.

The update said: “Discussions are continuing with the Department for Transport regarding new contractual terms for the Virgin Trains East Coast business, and we have submitted our bid for the new South Eastern franchise.

“We are progressing work on our shortlisted bid for the next competitively tendered East Midlands franchise and on our shortlisted bid with SNCF and Virgin for the West Coast Partnership franchise.

“Revenue growth across our existing rail operations has been broadly consistent with the trends seen in the first half of the year.”

The firm’s shares fell by 1.60p to close at 131.20p.

Picture: Steven Brown. Glenrothes Bus Station as Stagecoach buses were pulled off the road at the end of last month.