In a trading update for the 48 weeks to 2 April, the Perth-based firm said that the outlook for the rail industry is “more challenging” than last year as it feels the force of lower fuel prices, a slowdown in the UK economy and weaker earnings growth.
Its UK rail division, which includes South West Trains and East Midlands Trains, saw like-for-like revenues grow by 2.5 per cent, reflecting a slowdown in revenues across the wider market.
Meanwhile, sales at Virgin Trains East Coast and Virgin Rail Group’s West Coast franchise rose 4.9 per cent and 4.6 per cent respectively.
Stagecoach, led by chief executive Martin Griffiths, said: “We believe the reduced rate of growth reflects the effects of weakening consumer confidence, increased terrorism concerns, sustained lower fuel prices, the related effects of car and air competition, slower UK GDP growth and slowing growth in real earnings.
“We have taken and will take further steps to mitigate the effects of lower revenue growth, focusing on cost control and additional initiatives to grow revenue.”
It added that trading at its regional UK bus division, which includes inter-city coach business megabus.com, was in line with expectations, up 0.2 per cent in the period.