Thursday 10 December 2015

Stagecoach Group plc - Interim results

Stagecoach have published their Interim Results for the six months ended 31 October 2015. They say that they are "good financial results, in line with expectations"

·      Adjusted earnings per share* up 12.6% to 17.0 pence (2014: 15.1 pence)
·      Interim dividend per share up 9.4% to 3.5 pence (2014: 3.2 pence)
·      Investing for growth in regional UK bus markets
new mobile-friendly website and digital functionality for customers
smart multi-operator ticketing in English city regions
·      Accelerated expansion of coach operations in Europe, while North American mileage re-balanced to current demand
·      New East Midlands Trains franchise and plan to extend West Coast Trains
·      Successful re-financing of £400m bonds, with good financial position maintained
·      Cautious outlook
Recent revenue softer than expected in UK Bus regional operations
Lower rate of rail and inter-city coach revenue growth since mid-November in UK/Europe
Modest revision to full-year expectation of adjusted earnings per share

Chief Executive, Martin Griffiths, said: 

"These are a good set of results with overall earnings per share in line with expectations.

"We have continued to invest in making travel better and easier for our customers. Public transport is a shared responsibility between the public and private sectors. It is crucial that the investment of transport operators is matched by steps by the public sector to tackle the growing challenge of road congestion, which is holding back the potential of the bus. At the same time, shrinking public investment in local transport can impact on the cost of travel and the network of services. We look for efficiencies within our own businesses to protect our customers as far as we can from any impact of Government cuts.

"Our bus passengers in the UK are now benefitting from our new UK Bus website, which enables them to check live running times for their bus services and purchase travel on their smart phones. In 2016, we will also introduce a new mobile bus app. In addition, we are on track to complete delivery of smart multi-operator bus ticketing in England's main city regions within the next few weeks.
"Our rail businesses have demonstrated the benefits of a commercially-led approach, with passenger revenue growth and ongoing investment in improved facilities and better information for customers. We are working closely with Government and Network Rail to deliver new trains, greater capacity and more train services.

"We are pleased that the Department for Transport has agreed to extend our operation of East Midlands Trains and plans to extend Virgin Rail Group's operation of West Coast Trains. This will allow us and Virgin to continue to deliver improvements to our customers, attract more people to rail travel and increase the future value of these franchises to Government.

"In North America, we have taken steps to mitigate the impact of lower motoring costs on demand for our inter-city coach services by better matching the level of vehicle mileage to current demand.  The rest of the North America Division is performing in line with our expectations.

"Overall, the Group is in good financial shape and we were pleased to have put new bond financing arrangements in place earlier this year. Challenges remain in our sector in the short-term but the underlying strength of our businesses across the UK, continental Europe and North America, means we are well placed to drive value for our customers and investors."