Soaring revenues in North America and accelerating sales at its regional bus arm in the UK have put Stagecoach on track to meet its full-year profit forecasts.
The Perth-based transport group said its Megabus budget coach operation in Canada and the US remained its fastest-growing division, with sales up 23.7 per cent in the five months to September, boosted by new services in California and Texas.
As a result, the group’s North American business, which stretches from San Francisco to Toronto and New York, is set to deliver a “significant increase” in annual operating profits.
However, its Twin America joint venture in New York saw revenue fall amid an “increasingly competitive” market for sightseeing bus operators.
The firm, co-founded in 1980 by chairman Sir Brian Souter, also said sales at its UK regional bus business grew 5 per cent in the 24 weeks to 13 October, up from 4.5 per cent for the first 12 weeks of its financial year, thanks to rail replacement services in the Nottingham area.
At the Virgin Rail joint venture, which operates the west coast mainline, revenues rose 6.1 per cent. The division, 51 per cent owned by Sir Richard Branson’s Virgin Group, is mulling a bid for the east coast route.
Stagecoach also runs the East Midlands and South franchises, where sales growth slowed to 3 per cent, from 6.5 per cent in the 12 weeks to 21 July, partly because of resignalling work in Nottingham and the fact that last year’s takings were boosted by the London Olympics.
Stagecoach shares ended the day up 9p or 2.7 per cent at 343.2p, after the trading update. Half-year results are due on 11 December and Investec analyst John Lawson said the group, headed by chief executive Martin Griffiths, “remains one of our preferred picks in the sector.”