Strong progress at West Coast rail franchise keeps Stagecoach on track
TRANSPORT group Stagecoach yesterday said trading under its new West Coast train franchise, which began in June, has been strong as it confirmed it expects to meet full-year City expectations.
In an update ahead of a meeting with analysts the Perthbased company, headed by chairman Sir Brian Souter, also said its UK bus division saw likefor-like revenue growth for the 24 weeks to 12 October of 3.2 per cent with higher fare income.
Revenue growth in North America was described as “encouraging” with its Megabus arm there increasing revenues by 13.5 per cent. “The operating environment in North America is competitive, but we remain positive on the division’s prospects and the market opportunity,” the company added.
The group has also agreed £535 million of new bank facilities for the next five years.
“Although there are a number of challenges to growing profit in the year ending 30 April 2015, overall current trading is satisfactory and we are on course to meet our expectations for the year,” Stagecoach told investors.
Damien Brewer, an analyst at RBC Capital Markets, said he believed the Virgin West Coast franchise which Stagecoach has a 49 per cent stake in could be “an area of outperformance for the group”.
He also said the ending of the Virgin Little Red airline’s London-Edinburgh and LondonManchester routes would be likely to lift average airline prices and create a “more rational Anglo-Scottish travel market” which would also benefit the rail franchise.