Perth-headquartered transport giant Stagecoach increased its earnings forecast yesterday after a strong performance by its UK rail division.
The firm’s share rose as it announced an “increase in our expectations for adjusted earnings per share”.
In a trading update the firm revealed revenue growth across all its UK operations.
For the 44 weeks ending on March 2, sales in Stagecoach’s UK regional bus services increased by 3.4% while revenues from its London bus operation rose 1.3%.
Sales in UK rail, excluding Virgin Trains East Coast, rose 1.4% in the period while its partnership with Virgin Rail Group had seen a sales jump of 6.7%.
The firm said it was seeking to improve the performance of its London bus operation.
“We have undertaken a detailed review to identify opportunities to improve our performance on tenders for Transport for London contracts,” the company said.
“The bidding environment remains highly competitive and this will continue to exert pressure on the profitability of our UK bus (London) division.
“However, our priority remains securing contracts at a sustainable level where the financial returns reflect the capital invested.”
The firm said its market share of regional bus operations had grown.
Meanwhile, the performance of the rail businesses were “ahead of expectations” with strong underlying revenue trends.
“We have continued to make progress in achieving favourable outcomes from concluding industry charges and contractual matters associated with the expired South West Trains franchise, resulting in additional profit being recognised in the current financial year,” the firm said.
In the 10 months to the end of February, Stagecoach’s North American sales fell by 1.4%. This included a 1.9% dip in megabus.com
The company expects the disposal of the North America division to complete before the financial year end.
Stagecoach shares rose by 5.40p to close at 160.20p.
business@thecourier.co.uk
