Stagecoach, the Perth-based transport operator, is engaged in talks to sell its US business after an £85.4 million writedown in the division sent the group reversing into the red.
Interim results covering the six months to 27 October reveal that the group swung to a pre-tax loss of £22.6m compared with profits of £96.7m a year earlier.
Total revenues fell from £1.8 billion last year to just over £1.2bn after the loss of the East Coast and South West Trains franchises, with rail turnover down by 62.7 per cent. The interim dividend was maintained at 3.8p.
The firm said it was in “ongoing” talks over a sale of all or part of the US business, where it runs the megabus.com operation, but was reviewing all options. It added that the writedown for the US division reflected a “revised view on long-term profitability” as it struggles amid increased competition.
Chief executive Martin Griffiths said: “While we recognise the competitive challenges in some of our markets in the UK and North America, we are confident that public transport will be central to delivering government priorities to grow the economy, connect people and communities, reduce road congestion and improve air quality.
“We are reviewing strategic options for the North America division and that includes ongoing discussions regarding a possible sale of all or part of the business.
“The group is focused on making further progress in the second half of the year and we have increased our expectation of full-year adjusted earnings per share to reflect the above-forecast rail earnings in the first half of the year.”
The firm has had a challenging year after being stripped of the East Coast Main Line franchise by the UK government in June. The group, which ran the franchise as a joint venture with Virgin, has already revealed an £85.6m financial impact from losing the route, which was taken back into public control.
Stagecoach said it was set to take a further £45m cash charge for the lost franchise, as detailed in its annual report, but added that despite the East Coast woes, its rail business had performed better than it expected.