Rail performance flattens Stagecoach profits

Stagecoach Group has reported broadly flat profits for 2013/14 as lower profitability at its rail operations more than wiped out increased UK bus profits. In North America, the benefits of significant expansion of the Megabus coach business were largely offset by lower profits at the Twin America sightseeing business.

In the rail division, which consists of the East Midlands, SWT, and Sheffield Supertram contracts, operating profit fell from £41.2m to £34.3m due to rising premium payments to the Department for Transport and £9m of bid costs. At Virgin Trains, Stagecoach’s 49% stake returned an operating profit of just £2.6m, compared to £10.5m the previous year, as a result of the impact of operating under a management contract.

Stagecoach’s London bus operation was again the fastest growing UK business with operating profit rising 26% to £23.9m due to contract wins and ongoing measures to limit wage rises, staff numbers and vehicles lease costs. In the UK regional bus division, operating profit rose from £143.2m to £147.4m.

Overall, group operating profits increased 1% to £223.3m on revenue up 4.5% to £2.9bn.

“Across the group, we have a strong set of locally-managed businesses,” said Stagecoach chief executive Martin Griffiths.

 

This article appears inside the latest issue of Passenger Transport.

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