Rail sector helps Stagecoach secure growth

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Stagecoach has released its annual report for the year ended April 30, 2015.

Revenue increased to £3,204.4m (£2,930.0m in 2014) while operation profit was up £17m at £217.9m. Profit before taxation saw a £7.2m rise to £165.2m.

Adjusted earnings per share were up 2.7% to 26.7p (2014: 26p) with dividend per share up 10.5% to 10.5p (2014: 9.5p).

In terms of revenue UK Bus (regional) grew to £1,045.5m, up from £1,012.8m in 2014, while London operations grew to £260.6m, up from £244.9m, and UK Rail posted revenue of £1,478.4m, up from £1,252.0m. However, there was a slight 0.8% decline in revenue in North America, which dropped from £428.2m to £425.4m.

Operating profit in regional bus operations dropped to £141.1m from £147.4m, with profit margin declining by 1.1% to 13.5%. While profit from London bus operations grew to £26.3m (2014: £23.9m) North America saw a drop of £1.6m to £22.1m and UK fell from £34.3m to £26.9m. Stagecoaches share of the profit from its joint venture with Virgin Rail Group saw significant profit growth, increasing to £22.3m from £2.0m.

In a statement, the company said: “The operating profit of our wholly-owned bus operations fell a little short of the targets we set ourselves at the start of the year but this was offset by a strong performance in UK Rail and particularly from our Virgin Rail Group joint venture. As a result, we achieved our overall earnings per share target for the year.

“The sharp reduction in oil prices during the year resulted in a fall in car operating costs. The increased competitive advantage this gave to cars affected the profitability of some of our businesses, most notably our megabus.com inter-city coach operations in North America.

“The Group’s ongoing investment in new vehicles, technology and other assets is a key part of sustaining our success. In the year ended 30 April 2015, net capital expenditure was £140.9m (2014: £118.9m). Across all of its divisions, the Group is investing in initiatives designed to improve our service to customers and deliver future growth.

“Public transport is central to local communities and their aspirations for economic growth. In the UK, we support the devolution of more powers to local level to allow for tailored local investment and solutions. By working more effectively together, transport operators and regional authorities can achieve even stronger, more integrated transport systems at better value for taxpayers.

“In an era of continued limited public spending, commercial operators’ access to capital, operational expertise and customer understanding is critical to delivering affordable and accessible public transport.”