Consistent trading for Stagecoach

Current trading has been consistent with the Stagecoach management team’s expectations, according to a recent statement from the company. There is no change to the adjusted earnings per share it is anticipating for the year ending 30 April 2016. During the 12 weeks ended 25 July 2015, its UK Bus regional operations achieved like-for-like revenue growth of 1% and traded in line with expectations.

Growth in both Stagecoach’s UK regional bus operations’ commercial revenue and revenue from tendered and school services was affected by the timing of school holidays compared to last year. It expects stronger increases over August and September as this effect reverses. Concessionary revenue growth remains modest. Its expansion of the inter-city coach operations in mainland Europe is progressing and it remains ‘positive’ about the growth opportunities in that market. As we expected, its European business remains loss-making at this early, high-growth phase of its development but progress to date has been ‘encouraging’. Overall, estimated passenger journey numbers in the 12 weeks were 0.7% below last year, which was driven by a reduction in the number of concessionary passenger journeys that we believe reflects the poorer summer weather in various parts of the UK.

Its UK Bus operations in London achieved 1.5% increase in like-for-like revenue growth during the same 12 week period, which was consistent with management’s expectations. The number of contracts with TfL is similar to the prior year and the reported revenue growth principally reflects a net increase in contract prices resulting from the renewal of and/or variations to contracts. The operating environment in London continues to be adversely affected by traffic disruption, according to the operator, including congestion caused by road works, which affects the revenue the business receives as Quality Incentive Income based on its operational performance.

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