Chief executive Martin Griffiths claims industry-leading bus profit has driven up investment and customer satisfaction at group’s bus businesses
Stagecoach has highlighted how its industry-leading profitability has enabled it to drive investment and customer satisfaction above the levels achieved by other major bus operators.
At the presentation of its full year results, Stagecoach set out new analysis showing that on average it has spent 11% of its bus division’s annual revenue on new vehicles, equipment, plant and property during the last five years. By comparison, its study of three other major bus operators shows capital expenditure of between 4.5% and 7.5%.
During the five-year period, Stagecoach’s average profit margin was nearly 16% compared to between 7.5% and 10.5% at the three rival companies.
Stagecoach said its investment policy had contributed to its receiving the highest customer satisfaction score (86%) of any national bus operator in a survey by Passenger Focus (PT054).
The analysis adds to Stagecoach’s campaign against Quality Contracts generally and in Tyne & Wear in particular, where the integrated transport authority is continuing to consider the case for re-regulation.
“There is no evidence of market failure in Tyne & Wear where bus passenger satisfaction is among the highest in the UK,” Stagecoach chief executive Martin Griffiths said.
In the year to May 2013, Stagecoach recorded a small rise in operating profit at its deregulated bus operations from £162.7m to £165.0m, despite being hit by a £22m net cost from the Department for Transport’s cut
to Bus Service Operators’ Grant and changes in fuel prices. As a result, the profit margin fell from 17.9% to 17.1%. Like-for-like revenue grew 3.3% to £938.4m, driven by a 5.2% increase in commercial revenue to £569.9m.
Overall, Stagecoach’s group revenue across all its divisions rose 8% to £2.8bn; operating profit rose 8% to £256.3m.
Related reports can be found inside the latest issue of Passenger Transport:
Rail profits up
84% increase as DfT revenue support doubles
East London turnaround
..but competition will place pressure on margins
Group pauses expansion in US
Stagecoach plans action to combat falling profits
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