Tuesday, 27 March 2018

Stagecoach Trading Statement

Stagecoach Group plc has provided a trading update in respect of its financial year ending 28 April 2018, ahead of a series of meetings with analysts.  The expectation of the Group's adjusted earnings per share for the year ending 28 April 2018 has not changed from when the company announced thei interim results in December 2017.

Revenue growth
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 four weeks ended 3 March 2018     (0.1)%
UK Bus (London)                                   - forty four weeks ended 3 March 2018     (4.3)%
North America                                       - ten months ended 28 February 2018      (0.6)%
UK Rail (excluding South West Trains)    - forty four weeks ended 3 March 2018     3.2%
Virgin Rail Group                                    - forty four weeks ended 3 March 2018     2.8%
UK Bus (regional operations)
Trading at UK Bus (regional operations) continues to reflect the actions taken in early 2017 to adjust pricing and services to respond to changes in customer demand.  Vehicle miles operated for the year to date were 2.9% lower than in the equivalent period last year. Revenue per vehicle mile grew 2.9%, journeys per vehicle mile grew 0.2% and revenue per journey increased 2.7%.  
The reported like-for-like revenue growth has been suppressed in recent weeks by the widespread snowstorms throughout the UK. During the most recent four-week period, like-for-like revenue declined by 2.5% from the equivalent prior year period, illustrating the scale of the impact of these extreme weather conditions. Excluding the most recent four-week period, like-for-like revenue growth for the forty weeks ended 3 February 2018 was 0.1%.
UK Bus (London)
The reported revenue decrease for the UK Bus (London) Division is in line with expectations and reflects the impact of contracts lost in the prior year.  Stagecoach remain satisfied by the performance on current year tenders for Transport for London contracts.

North America
The recent revenue trends in North America are lower than growth seen in the first half of the year, reflecting the timing of contract work during the year and more severe weather than forecasts anticipated over the winter months.  The like-for-like revenue decline of 0.6% for the Division includes a 4.6% decline for megabus.com North America, reflecting previously implemented mileage changes at megabus.com with revenue per mile for the period up 1.1%.  The other businesses in North America reported like-for-like revenue growth of 1.2% for the year to date.

UK Rail and Virgin Rail Group

Further progress has been made in UK rail.  Discussions are continuing with the Department for Transport regarding new contractual terms for the Virgin Trains East Coast business, and the company have submitted their bid for the new South Eastern franchise.  They are progressing work on the shortlisted bid for the next competitively tendered East Midlands franchise and on the shortlisted bid with SNCF and Virgin for the West Coast Partnership franchise.  Revenue growth across existing rail operations has been broadly consistent with the trends seen in the first half of the year.