Overall profitability at Stagecoach has remained good and there has been no significant change to its expected adjusted earnings per share for the year ending April 30, 2013.
However, recent extreme weather in North America and the ongoing costs in the increasingly competitive North American intercity coach market resulted in the group lowering its short-term operating profit expectations for the division. Despite this, the group aims to continue to develop the business in North America and the megabus.com brand. However, at a group level, the impact of this has been largely offset by continued good trading in the firms UK businesses and lower than previously expected finance charges.
Like-for-like revenue growth for the financial year to date in UK Bus (regional operations) was 3.8%, UK Bus (London) 1.5% and North America (including Megabus.com, excluding disposed Wisconsin school bus business) 10.4%.
The financial position of the group remains strong. Consolidated net debt has since October 31, 2012 reflecting the acquisition of UK Bus businesses, the reversal of favourable working capital timing differences in the first half of the financial year and continued investment in the group’s vehicle fleet.
Other highlights of the year included:
#In November 2012, the group announced a planned acquisition of bus operations in Wigan. The acquisition was cleared by the Office of Fair Trading and was expected to complete shortly.
#In December 2012, the United States Department of Justice and the Attorney General of the State of New York initiated legal proceedings against the group’s joint venture, Twin America, and others, alleging that the formation of Twin America in 2009 was anticompetitive. Stagecoach disagrees with the allegations and their assessment of the joint venture. Several private actions have also been filed in relation to the matter.
#In December 2012 and January 2013, the group completed acquisitions from FirstGroup of bus operations in Wigan and in Chester, Wrexham and Birkenhead.