Perth-based public transport group Stagecoach hailed “encouraging” prospects in the UK rail market as it revealed an increase in full-year pre-tax profits.
The firm, which employs around 39,000 across its global operations, saw group revenues rise by £274.4 million to £3.2 billion in the year to April 30.
Reported pre-tax profits for the period were £7.2m ahead at £165.2m with adjusted earnings per share coming in 2.7% ahead at 26.7p.
The full-year dividend per share was up 10.5% at 10.5p.
Chief executive Martin Griffiths said the results were “solid” despite the challenges of tight local and central government spending and the impact of lower fuel prices meaning it was harder to tempt passengers away from cars.
“The group is in good financial shape and overall we have delivered on our expectations for the year,” he said.
“We have made a satisfactory start to the 2015/16 financial year and look forward to building further on the group’s achievements.”
On an operating profit basis, the UK bus business remained the largest division by a significant margin.
The London subsidiary saw operating profits increase by £2.4m to £26.3m but the regional business was £6.3m lower at £141.1m.
However, that figure included around £4m of additional start-up losses relating to the roll-out of the Megabus network in Europe a business which has added 50 coaches in the past year and which launched successfully in Italy this week and is eyeing expansion into France once the market is deregulated.
The firm’s North American Megabus operation has been hit by lower fuel prices and short-term investment is being drawn back as a result.
Finance director Ross Paterson said the “bright light” in the past year had been the firm’s rail division which saw revenues increase by £226m to £1.47bn.
While operating profits were lower within its wholly-owned rail operations, its Virgin Rail group joint venture (JV) returned £22.3m in the year, up more than £20m on the previous year.
The JV began operating the east coast line in March and will introduce a new fleet of high-tech Hitachi trains during the eight-year franchise period.
Mr Paterson said: “We’ve had a good year and the bright light for us in particular has been the rail division. Rail in general is fast growing and positive.”
Stagecoach shares closed up 10.46 at 417.00 last night.
business@thecourier.co.uk