Stagecoach profitability ‘satisfactory’
In an interim management statement covering available information for the period to 26 February 2014, Stagecoach Group Plc said the overall Group profitability has remained ‘satisfactory’. There has been no significant change to the expected adjusted earnings per share for the year ending 30 April 2014, which the company claims reflects the strength in the underlying trading of the business given the effects of the severe weather in both the UK and North America. Its UK Bus regional operations achieved a like for like revenue growth of 4.6%. An increase in its commercial revenue has contributed most to the overall revenue growth, with concessionary, tendered and school revenue also continuing to grow. The division ‘performed well’ during the period, with passenger volumes growing 1.2%. In December 2013, the Group completed the acquisition of Go West Travel Ltd, trading as Norfolk Green. The effect of the acquisition on profit for the year ending 30 April 2014 is not material.
Stagecoach’s London bus operations ‘performed strongly’ in the period, with like for like revenue growth of 3.1%, benefiting from new contracts won last year. From 1 October 2013, the business no longer receives BSOG but this is offset by a corresponding uplift in the contract prices paid to the business by TfL. Excluding this uplift in contract prices, revenue for the 40 weeks has increased by 0.5%. As expected, the decline in revenue in the first half of the financial year has reversed as new contracts come on stream.