Positive results for Stagecoach
In its preliminary results for the year ending 30 April 2014, Stagecoach achieved further revenue and profit growth. Revenue was up 4.5% at £2,930.0m (2013: £2,804.8m). Total operating profit (before intangible asset expenses and exceptional items) rose 1.2% to £223.3m (2013 restated: £220.7m). Earnings per share before intangible asset expenses and exceptional items were 5.7% higher at 26p (2013 restated: 24.6p). In line with the Group’s performance, the Directors have proposed a final dividend of 6.6p per share, giving a total dividend for the year up 10.5% at 9.5p (2013: 8.6p).
In its UK Bus regional operations, revenue rose 4.8% to £1,012.8m (2013: £966.7m), with like for like revenue up 4.6% to £982.7m (2013: £939.8m). Its operating profit was £147.4m (2013: £143.2m), up 2.9%. The previous year’s financial results to 30 April 2013 included revenue of £18.8m and operating profit of around £4m arising from the delivery of contracts to provide transport for the 2012 Olympic and Paralympic Games. Excluding that £4m operating profit, the division has increased operating profit by £8.2m or 5.9% in the year ended 30 April 2014. Overall like-for-like passenger volume growth for the year was 1.3%. Despite the positive results, continuing reductions in central and local government investment in bus services have impacted the company. This has been particularly acute in Wales where it announced a 10% reduction in its fleet, the planned closure of its Brynmawr depot and a number of service reductions, following a succession of Welsh Government bus investment cuts.
In December 2013, it acquired Norfolk Green, which it claims will allow it to expand its operations in the east of England. It has now placed orders worth over £90m for around 534 new greener vehicles for the UK Bus regional operations, benefitting communities in regions across England, Scotland and Wales. Most of the buses and coaches will be produced in the UK, supporting British manufacturing jobs and smaller businesses in the supply chain. It takes the Group’s total orders of new buses and coaches for its regional bus operations in the UK to over £550m in the last seven years.
In the London bus market, revenue was at £244.9m (2013: £232.7m), up 5.2%. Operating profit was £23.9m (£19m), a 25.8% increase. The London operations have already surpassed Stagecoach’s expectations when it reacquired the business in 2010. It has announced orders for around £21m of hybrid electric buses for London to be delivered in 2014/15. The focus for the business sector now remains on keeping costs under control and aiming to retain and win contracts on acceptable terms.
Chief Executive, Martin Griffiths, said, ‘We have met our expectations for the year. Across the Group, we have a strong set of locally managed businesses which are improving services for our customers, supporting the economy and communities, and adding value for our investors. In the UK, we have placed record orders for new vehicles at our regional bus networks in 2014/15, which is a sign of our confidence in continuing to get people out of their cars and back on board the bus. We have the lowest fares of any national bus operator and the highest customer satisfaction. In London, we are winning and retaining contracts on the right terms and our customers are benefitting from improved operational performance. Our growing megabus.com business is continuing to expand and is leading a resurgence in good value, high quality inter-city travel options for people in the UK, mainland Europe and North America. I am confident we have new ideas and new opportunities ahead to deliver further sustainable growth in our business.’