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.