Stagecoach sticks to guidance despite slowing bus revenues

Stagecoach, led by chief executive Martin Griffiths, said trading conditions were 'more challenging'. Picture: Fraser Band/Stagecoach/PA Wire
Stagecoach, led by chief executive Martin Griffiths, said trading conditions were 'more challenging'. Picture: Fraser Band/Stagecoach/PA Wire
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Transport giant Stagecoach today said it remained on track to meet its full-year hopes in the face of “more challenging” trading conditions.

The update came as the Perth-based group said like-for-like revenue growth at its UK bus business slowed to 0.7 per cent in the 40 weeks to 6 February, down from the 1 per cent increase seen at the half-year stage.

In December, the firm told investors that softer-than-expected sales at some of its regional bus operations, combined with the impact of the terror attacks in Paris, had caused it to “modestly” revise down its earnings forecast for the financial year ending 30 April.

READ MORE: Stagecoach blames profit alert on Paris terror attacks

Today the group insisted its earnings expectations had not changed “significantly”, although it also said that revenue growth at its UK rail business had been lower than in the first half of the year.

However, there were signs of better trading at Stagecoach’s North American operations, including the Megabus budget inter-city coach service, which has seen a drop in demand caused by lower petrol prices tempting passengers back to their cars.

During the nine months to 31 January, like-for-like revenues in North America were down 4.4 per cent, although that marked an improvement on the 5 per cent fall reported for the six months to the end of October.

“As we anticipated, second-half revenue in North America is benefiting from new contract wins,” said Stagecoach, led by chief executive Martin Griffiths.

The group added: “Although we continue to operate in a more challenging environment, we remain on track to meet our expectations for the year.”