Stagecoach Group plc has published a trading update, covering available information for
the period to date.
Financial performance
Since the announcement in December 2014
of the Group's half-year results to 31 October 2014, the overall
profitability of the Group has remained satisfactory, and there has been
no material change to expected adjusted earnings per share for the
year ending 30 April 2015.
Like-for-like revenue growth for the financial year to date in each of the Group's main businesses is provided below.
UK Bus (regional operations)
|
- forty weeks ended 1 February 2015
|
2.7%
|
UK Bus (London)
|
- forty weeks ended 1 February 2015
|
9.8%
|
UK Rail
|
- forty weeks ended 1 February 2015
|
7.6%
|
North America (including Megabus.com)
|
- nine months ended 31 January 2015
|
1.9%
|
Virgin Rail Group
|
- forty weeks ended 1 February 2015
|
6.7%
|
UK Bus (regional operations)
On a like-for-like
basis, the UK Bus (regional operations) Division has grown year-to-date
passenger volumes by 0.4% and revenue by 2.7%, consistent with its
strategy to deliver organic growth. Although growth in January was
lower than in the previous months of the year, this was largely due to
year-on-year variations in weather and the company do not believe it is
indicative of any change in the underlying rates of growth.
The group remain excited at the prospect of further expanding
megabus.com coach services in continental Europe, building on the
success of megabus.com in the UK and North America. Taking account of
our latest expansion plans, we now expect net start-up losses of around
£5m for the year ending 30 April 2015 (slightly higher than previous
expectations) and further losses next year as this
significant opportunity is developed.
Revenue growth in the UK Bus (London)
Division has been satisfactory during the period although some revenue
was lost in January as a result of a 24-hour strike by bus drivers
affecting all major operators of Transport for London bus contracts.
Excluding the previously reported uplift in contract prices to
compensate for the cessation of Bus Service Operators' Grant (a rebate
of fuel duty), revenue increased by 7.3%.
UK Rail
UK Rail
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New Virgin East Coast Livery |
The financial performance of our UK Rail
Division is in line with expectations, reflecting the focus on
growing revenue and controlling costs to mitigate the substantial
increases in premia payments to the Department for Transport.
The new InterCity East Coast rail franchise began on 1 March 2015 and the group are pleased to have taken over responsibility for East Coast train services together with partner, Virgin. The new franchise is expected to significantly enhance the profitability of the UK Rail Division in the year ending 30 April 2016 and beyond.
North America
Since December 2014, there has been no
significant change to expectations of North America operating profit
for the year ending 30 April 2015. Like-for-like revenue growth of
1.9% for the nine months includes revenue growth of 10.3% at
megabus.com. The rate of revenue growth is below that experienced
earlier in the year reflecting (a) the effect of the significant fall in
fuel prices on demand for our services, particularly inter-city coach
services on our megabus.com network and (b) lower revenue growth in
December and January for both megabus.com and non-megabus.com services,
partly due to the effects of adverse weather conditions. The operating
environment in North America remains competitive and see continued market opportunities within the division.
Virgin Rail Group
Trading to date under Virgin Rail Group's
West Coast Trains franchise remains strong, and under the terms of the
franchise contract, UK taxpayers are benefitting from this performance
as part of a profit sharing agreement with the Department for Transport.
Twin America
We and our joint venture partner are
continuing to progress towards a settlement with the US Department of
Justice and the New York Attorney General of the previously reported
litigation relating to our Twin America joint venture.
The New York sightseeing market remains
highly competitive and we still expect a relatively low profit from Twin
America in the year to 30 April 2015.
Outlook
Although there are a number of previously
reported challenges to growing profit in the year ending 30 April 2015,
overall current trading is satisfactory and the group are on course to meet expectations for the year.