Member Article

Stagecoach report UK and North America growth

Bus and train operator Stagecoach has been bolstered by revenue growth in its UK and US bus operations.

The firm, which own a joint stake in the Virgin Rail Group, reported 3.6% like-for-like revenue growth across its UK bus business, and a 10.7% growth in revenues from its North American arm, including megabus.com.

The Group said a 0.9% decline in revenues from its London bus operations were explained by restructuring and the disposal of some less profitable contracts.

Despite being initially stripped of the West Coast train franchise amid the contract awarding furore, Stagecoach said: “The Group welcomes the opportunity to participate in these reviews where appropriate.”

In a recent in-house interview for investors, Stagecoach Group Chief Executive, Sir Brian Souter, said: “We’ve had another strong year right across the whole Group. There’s no doubt the general weakness in the economy and the reduction in public sector spending on transport have brought their challenges for our sector, but Stagecoach has been resilient and is continuing to grow strongly.

“We’re seeing commuters and leisure travellers switching from the car to our bus and rail services in the UK and North America. The Group is also well positioned to benefit from opportunities for growth in the year ahead.”

In response to questions around expansion and acquisitions, Sir Brian said: “During 2011-12, we returned approximately £340m in cash to our shareholders in addition to the regular dividends. We looked at whether there were any significant opportunities at the time and we decided the best way to use shareholders’ money at the time was to return cash.

“However, we are always open to the right deal at the right price that might create additional value for our shareholders, as our recent announcement of a planned acquisition in North America demonstrates. We are progressing with our turnaround strategy at London bus and we will evaluate opportunities to acquire smaller UK bus businesses that would complement our existing regional operations.

“We are also excited about the next phase of our growth plan for our budget coach brand, megabus.com, in the UK and North America, as well as testing the market in mainland Europe.”

This was posted in Bdaily's Members' News section by Tom Keighley .