Positive revenues at Stagecoach’s rail operations have offset a downturn in bus revenues, according to a trading statement yesterday that made no mention of this week’s news that the group has lost the South West Trains franchise after more than two decades in control.
The Perth-based transport giant’s UK rail division, which includes its majority stake in the Virgin East Coast franchise, saw like-for-like sales lift 1.6 per cent in the 44 weeks to 4 March.
• READ MORE: Stagecoach loses SWT franchise to rival FirstGroup
Revenue growth at Virgin Rail Group’s West Coast franchise was higher than the industry average, it noted, which partly reflects sales being adversely affected in the second half of the previous financial year by the temporary closure of Lamington viaduct in southern Scotland.
Total like-for-like passenger journeys fell by 1.7 per cent in the UK bus, regional operations, division, largely as a result of “weak underlying local economic conditions in some parts of the UK and sustained lower fuel prices”.
The group, which is chaired by its co-founder Sir Brian Souter, said it remained “positive on the longer term opportunities” within the regional bus unit.
Shares travelled ahead yesterday as investors pointed to the encouraging performance at the rail division.
Martin Brown, an analyst at brokerage Shore Capital, noted that “Stagecoach remains a highly cash generative business”.