Stagecoach UK bus business robust performance

ANOTHER robust performance from Stagecoach’s UK regional bus business should help the transport group report growing full-year profits this week.

The Perth-based group – which is one of the UK’s biggest bus and coach operators, with around 8,000 vehicles and 2.5 million passengers every day – is forecast to increase underlying profits to £210 million for the year to 30 April, up from £202.5m.

The firm, chaired by co-founder Sir Brian Souter, reported UK regional bus sales up 3.6 per cent in the first 11 months of its financial year.

Underlying sales in its UK rail arm, which includes South West Trains and East Midlands Trains, increased 5.4 per cent year-on-year over the same period.

Virgin Rail, in which it holds a 49 per cent stake, increased sales by 3.1 per cent during the 11 months.

Virgin Rail serves the West Coast Main Line and will continue to run the franchise until at least 2017 after the UK government’s botched retendering saga.

While Stagecoach faces pressure from tough competition at its operations in the United States, it recently said current trading remains good and its prospects are positive.

Analysts at RBC Capital Markets said: “Reducing fuel cost pressures, plus modest wage cost pressure should help, in our view, while in the UK rail arm the succession of contracts to bid for could create additional value for the company if any are won.”