Stagecoach slowed in London and US markets

transport: Group still on track to meet year’s targets

Roadworks in London and the fall in fuel prices plus the strength of the dollar in the US have affected the performance of Perth-based Stagecoach Group.

Overall trading has been satisfactory, however, and the group is on course to meet expectations for the full year.

Like-for-like revenue growth for its UK regional bus business in the 24 weeks to October 17 was 1%, and its UK Bus London division reported growth of 1.4%.

The capital results reflected contracts with Transport for London, but the group added: “Growth continues to be impacted by congestion resulting from roadworks.”

This affected the revenue received through an incentive scheme for operational performance.

In North America revenue fell 5.6%, with the fall in fuel prices affecting demand for megabus.com inter-city coach services where like-for-like revenue for the five months to September 30 was 5.9% down.

Trading elsewhere in North America was in line with expectations, but competition and the strength of the US dollar was affecting sightseeing and other leisure-related businesses.

The UK rail business, excluding the Virgin Trains East Coast joint venture, rose 5.8% year-on-year, while the Virgin franchise delivered an 8.7% rise in revenue.

Stagecoach has revised up its UK rail operating profit forecast for the full year given the good cost control in the business and the clarity on the revised terms of the East Midlands franchise.

New Transpennine and East Anglia franchises are being sought.

Full interim results will be published next month.