As rail fares set to soar, Virgin reveals £753m revenues

VIRGIN Trains rubbed salt in the wounds of hard-pressed rail passengers yesterday as it unveiled record revenues and a huge payout to the UK government just a day after massive fare increases for next year were confirmed.

The operator, which runs the Glasgow-to-London west coast mainline, posted an 11 per cent jump in revenue to £753 million in the year to 31 March, prompting a payment of £110m to Treasury coffers under the terms of its franchise.

The company’s joint owners, Stagecoach and Virgin Group, shared a £32.5m dividend.

As part of the franchise agreement, Virgin Trains pays the UK government, or can receive a subsidy, if actual revenues exceed, or fall short, of those anticipated. Last year, it received a UK government subsidy of £20m.

Pre-tax profits dropped to £55.7m from £69.4m after the UK government’s payment. After-tax profits fell 21 per cent to £39.9m, out of which £6.5m is being held back for investment.

As well as higher fares, Virgin said it has gained market share from airlines between Manchester and Glasgow and London. The results came as a boost to the firm’s attempt to retain the west coast mainline franchise. It has run it since 1997, but the franchise is out to tender again.