Contract to transport athletes and officials worth £4m profit

Profits at Stagecoach’s UK bus division have been boosted by a £4m profit from its contract to transport athletes and officials to the London Olympic and Paralympic Games.

The work proved considerably more beneficial to the group than industry sources had anticipated. Some senior industry figures had speculated that Stagecoach was likely to have made a loss on the complex project. However, Stagecoach’s interim results for the six months to October 31 showed that the Olympic contract generated a lucrative 21% profit margin on revenue of £18.8m.

The arrangements included managing temporary transport depots at Beckton and West Ham, providing 1,000 buses, half of which were leased from other operators, and over 2,600 drivers and support staff. Nearly 2,000 of the staff were seconded from Stagecoach’s regional bus operations from around the country, with many accomodated in specially chartered cruise ships moored at the Royal Docks in East London.

The Olympic contract contributed over half of the growth in operating profits generated by Stagecoach’s deregulated bus operations during the six months, which rose from £80m to £87.2m. Revenue increased from £451m to £488m, and the industry leading profit margin rose  slightly to 17.9%.

Apart from the Olympic contract, the rise in operating profits at the deregulated bus operations was driven by continuing growth in demand which saw passenger numbers increase 1.3% and revenue on commercial services increase 6%. A £5.2m cut to BSOG payments was largely offset by lower pension costs.

 

Stagecoach’s Olympic team:

  • Olympic project manager: Liz Esnouf, Operations Director, Stagecoach Midlands
  • Olympic general managers: Rob Jones, Operations Director, Stagecoach West Scotland;Richard Kay, Operations Director, Stagecoach East Midlands

 

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