Stagecoach CEO heavily critical of concessionary fares scheme and regulation plans
Stagecoach’s shares saw a reported 9% drop after it reported a slowdown in profit. It attributed slower growth in the UK Bus business to increasing competition in Newcastle and Manchester as well as decreased fuel prices for private cars, leading to more people driving themselves instead of using the bus.
Revenue was reported as £1,545m (2013: £1,473.9m) with operating profit at £123.5m (2013: £120.1m). Profit before taxation was marginally down on 2013 by £200,000, at £98.3m.
Adjusted earnings per share increased by 3.4% to 15.1p (2013: 14.6p) with interim dividend per share up 10.3% to 3.2p (2013: 2.9p).
In the group’s statement, Stagecoach CEO Martin Griffiths said: “Overall the group is in excellent financial shape and we are well placed to drive value through new opportunities in our core bus and rail markets. While we have changed our view of the likely divisional mix of profit for the year ending April 30, 2015, with lower expected operating profit from our regional UK Bus and North America businesses broadly offset by other areas, we remain on course to achieve our expected adjusted earnings per share for the year.”
However, the group’s CEO attacked Labour’s transport plans in the media, criticising the concessionary fares scheme and the impending Tyne & Wear Quality Contract Scheme.
According to The Guardian, Martin Griffiths said: “I won’t provide a service and not get properly paid for it. You would not go to Tesco and say ‘we’re going to let OAPs have free food.’ They cannot stand up there and be dishonest with people and say we’re going to have a scheme but not fund it properly. That punishes people who do pay, whether it’s full-fare paying adults or the children or young adults who I want to be the passengers of the future.
“Are there some passengers who board our buses who could probably afford to pay? Of course they could. As a voter, I want to know bus services are going to be protected. They have to decide what the priority is. They can’t be dishonest just because these people vote – eight million of them – so ooh, don’t tamper with the concession scheme. Politicians are being disingenuous with all of us.”
“[The Tyne & Wear Quality Contract Scheme] is more about control rather than what’s good for passengers. Talk of superprofits is nonsense.
“The myth is fares go up, firms make profit. It’s rubbish. I’ll tell you, for the risk [Stagecoach] runs, and the management effort my team put in, we get underpaid.”
Cllr James Lewis, who chairs a group of six transport committees, responded to Martin Griffiths’ comments.
He said: “The comments are shocking and deplorable. That anyone who operates in an industry that is dependent on public subsidy, and is relied upon by the poorest in country, could think that six-monthly profits that have risen to nearly £125m are not enough, shows that this is a company that is out of touch.
“The fact is that there are millions of older people on low incomes for whom the concessionary pass is a lifeline. Research by KPMG for the bus industry-funded Greener Journeys, also showed that there are substantial economic benefits from the concessionary pass.”