Stagecoach profits slowing in multiple divisions

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Stagecoach Group has released preliminary results for the year ended April 30, 2017, with profits falling almost across the board.

The group’s revenue increased to £3.94bn from £3.87bn in 2016, but operating profit was down considerably at £47.3m, a £123.8m fall from the previous year. Profit before tax stood at £17.9m (2016: £104.4m) while earnings per share were down from 17.1p in 2016, to 5.5p.

The group’s proposed final dividend per share was increased from 7.9p to 8.1p, with a full year dividend per share of 11.9p (2016: 11.4p).

The statutory figures posted by Stagecoach included ‘intangible asset expenses and exception items.’ With these excluded, adjusted operating profit stood at £192.8m (2016: £228.8m), profit before tax was £158.7m (2016: £187.4m) and earnings per share was stated as 24.4p (2016: 27.7p).

Regional UK Bus operations saw revenue shrink by 1.7% to £1.015bn, with operating profit falling from £137.3m to £121.1m on a 11.9% margin (down from 13.3%). In London, revenue fell by 1.4% to £263.4m, with profit falling by £1.8m to £18.4m.

Though revenue at megabus Europe grew by 9.8% to £20.2m, the operation continued to be loss-making. The loss reduced from £24.1m in 2016, to £4.3m. In North America, revenue and profits fell in its functional currency of dollars, but once converted, the operation in fact saw a revenue increase from £430.9m to £488.8m and an operating profit increase from £18.9m to £19.3m.

Revenue growth of 1.5% in UK rail was offset by operating profit and margin halving to £31m and 1.4% respectively.
Stagecoach Group CEO, Martin Griffiths, said: “I am pleased to report adjusted earnings per share for the year in line with our expectations and a further increase in our dividend per share. We continue to manage the business with a focus on sustainable growth over the long-term.

“Our multi-million pound investment in greener vehicles, smart technology and skilled employees is delivering a better and easier travel experience for our customers. Bus and rail services are an important part of achieving long-term growth for our communities and regional economies. We are working closely with public sector partners to deliver the full benefits of high quality public transport for customers and our business.

“Overall, we believe in the long-term prospects for the business and public transport remain positive.”