Stagecoach Group has published its results for the half year to 26 October.
The key statutory figures include revenue of £800.2m, with an adjusted total operating profit of £79.6m, down from the equivalent period in 2018. The reduced revenue reflects the loss of the East Coast and East Midlands Trains rail franchises, whilst the reduction in operating profit is attributed to factors including the poorer summer weather and non-recurrance of significant rail replacement work in the Derby area.
However, unadjusted operating profit from continuing operations was £77.0m (2018: £63.3m), with the increase attributed to the non-recurrence of expenses for the equalisation of guaranteed minimum pension benefits. A dividend of 3.8 pence per share is maintained, with no change expected to 2019/20 earnings per share. Net debt stood at £352.6m.
Like-for-like revenue across regional bus operations increased 1.6% compared to the previous year, with megabus and tendered/school services seeing the largest rise, cancelled out by the loss of rail contract work. Operating profit dropped from £65.2m to £57.1m. London saw a reduced operating profit of £5.1m, down 16.4%, with an operating margin of 4.2%.
Looking forward, the group said it sees significant potential growth, with public transport being at the forefront of addressing climate change and growing urban populations, along with the government’s pro bus policy and funding commitments. The group plans to continue to modernise its customer offering with simpler fares, introduce new coach and bus services where opportunities exist, and increase focus on direct corporate sales, working with major employers and business parks across the UK.
In London, the East London contract has been consistently at the top of the TfL service quality tables, whilst the group says it continues to take a disciplined approach to bidding for new contracts in the capital.
Despite the exit from US operations and from UK rail franchising, the Group has recently bid to operate Stockholm’s Roslagsbanan commuter railway, a decision on which is due in spring 2020.
Martin Griffiths, Stagecoach Group Chief Executive, said: “We are pleased to have delivered a solid set of financial results and further improvements for our customers over the first half of the financial year. Our updated strategy is based on three key objectives: maximise our core business potential, manage change through our people and technology, and grow by diversifying. We have designed the strategy to deliver a sustainable business, diversify our exposure to risk and create value for all of our investors, customers, employees, communities and the environment. Our strategy will continue to be underpinned by a clear focus on safety and customer service.
“Investment is underway to up-skill our teams, improve our back-office systems and make our business more agile. We are also at the forefront of industry leading innovation in greener vehicles, autonomous technology, contactless travel, and app-based ticketing and information. We welcome recent Government pro-bus policy and funding commitments. Combined with our own initiatives and our support for the wider UK bus industry strategy, we are well placed to benefit from the global drive for better mobility, cleaner air and action to protect the future of our planet.”
