The chief executive of Stagecoach has warned Brexit could lead to “continuing economic, consumer and political uncertainty” as the public transport giant reported a “solid” year.
Shares in the Perth headquartered group pushed forward more than 3% in morning trading despite exceptional costs dragging profits lower for the year to April 30.
The company generated a full-year pre-tax return of £104.4 million, down from £165.2m in 2015.
Stripping out the one-off costs – which principally related to a write down in the value of its Twin America sightseeing business and refinancing of bonds – the group produced a pre-tax profit of £187.4m, up from £185m a year earlier.
Revenues pushed ahead by £667m to £3.87 billion in the year, largely due to the impact of the first full-year of the Virgin Trains East Coast rail franchise, in which Stagecoach has a 90% interest.
In addition to its preliminary results, Stagecoach announced the disposal to FlixBus of the retail operation of its Megabus Europe network.
The company said it expected to report an exceptional gain from the sale once it had been completed. It will also continue to operate coach services on behalf of FlixBus in Europe for at least three years.
“These are a solid set of results, with further revenue and underlying profit growth,” Stagecoach chief executive Martin Griffiths said.
“We are experienced at managing the challenges we face, and the improvements and changes we are making now should ensure that we continue to have a strong portfolio of sustainable and growing businesses for the long-term.
“We are investing for growth and improving the journeys of our customers through new digital tools, smarter ticketing, and the introduction of greener and more comfortable buses and trains.
“At the same time, we are taking a prudent approach to controlling costs and ensuring our transport networks meet the changing conditions and requirements of our customers.
“Our locally-managed bus companies have strong partnerships with local authorities, allowing them to deliver tailored transport solutions to help communities get to work, access health and education, and enjoy shopping and leisure.
“We have been independently assessed as offering the best value fares of any major UK bus operator and our customer satisfaction levels are amongst the best in the sector.
“We have confirmed the sale to FlixBus of the retailing part of megabus Europe. I am pleased that we will continue to operate a number of European inter-city coach services as a contractor to FlixBus and we hope to build on that new relationship.
“In North America, we have taken steps to match our megabus.com inter-city coach services to changing patterns of demand and we are well placed to expand our networks as conditions improve.
“We note the result of the recent referendum in favour of the UK leaving the European Union.As with other businesses, we are closely following developments in this area.
“Although we have little business in Europe outside the UK, we acknowledge the referendum result may lead to continuing economic, consumer and political uncertainty.
“Like other business sectors, we are affected by reduced public spending and factors in the wider economy, such as weakening consumer confidence and slowing growth in both UK GDP and real earnings.
“Public transport also faces the challenge from sustained lower fuel prices, the related effects of car and air competition, as well as traveller concerns over global security.
“Nevertheless, we have experienced management teams who are working hard to stimulate growth and we have not significantly revised our expectation of 2016/17 adjusted earnings per share.
“We remain positive on the long-term prospects for public transport and the Group remains in a strong financial position.”
