Dampened figures from Stagecoach

Stagecoach has delivered a strong set of full-year results, but with an underlying downward trend, which has seen a slide in operating profit, profit before tax, margins and earnings per share.

In a year which has seen a withdrawal from Megabus Europe, an exit from Sightseeing in New York, tender losses in London and the ending of the South West Trains franchise, the final dividend has more than halved to 3.9p per share (2017 – 8.1p) with Chief Executive Martin Griffiths saying that total dividend will be normalised at around 7.7p per share (2017 – 11.9p). In a year where statutory results were “adjusted” for both years, he also said giving up the Virgin Trains East Coast rail franchise would be costing the group £85.6m.

For the year ended 28 April 2018, the group’s total turnover fell over 18% from £3.9412bn to £3.2268bn. Total operating profits (excluding exceptional items) fell nearly 3% from £185.1m to £179.9m, with more than 70% of them coming from UK bus operations.

Pre-tax profits before goodwill and exceptional items fell by over 4% from £151m to £144.8m, and earnings per share fell from 23.3p to 22.3p.

The majority of the operating profit (£126.2m) came from the UK bus division, and although the revenue was down over 6%, the margin outside London was 11.2%, and in London 5.3%. A decline in tender revenue mainly reflected further reductions by local authorities in the tendered bus services that they support. Stagecoach believes the bottom of this cycle has not yet been reached, and anticipates some further cuts in tender services over the next year.