West Coast success fails to keep transport group on track
Despite a strong performance from the West Coast Main Line operatiton, public transport group Stagecoach has seen a 15.3% fall in full year pre-tax profit after difficulties at its bus and rail operations.
The company, which is a partner with Virgin Rail in the WCML, said pre-tax reached £158.7m (2016: £187.4m) to the year ended April 29, 2017. Full year revenue rose 1.8% to £3.94bn (2016: £3.87bn).
The venture with Virgin Rail, in which Stagecoach is a 49% stakeholder, was the rgoup’s outstanding success. It said it had shown a profit growth, with record punctuality and high levels of customer satisfaction.
Revenue growth was also above the sector average. It grew to £556.8m (2016: £525.3m), with pre-tax profit rising to £24.8m (2016: £24.2m).
“Virgin Rail Group’s West Coast rail franchise continues to perform well, with revenue growth higher than the industry average, and that is benefitting taxpayers through profit share payments by the business to the Department for Transport,” said the results statement.
“The franchise, which is contracted to run until March 2018, is continuing to perform ahead of our expectations at the time the contract was agreed.”
The Government has confirmed that it plans a short-term franchise of approximately 12 months to cover the period from the end of the current West Coast franchise in March next year until the planned start of the new West Coast Partnership franchise in April 2019.
A joint bid by Virgin, Stagecoach and SNCF has been shortlisted as one of the potential operators for the new franchise.
However, Stagecoach’s overall performance was not as successful as the partnership venture.
It said while growth had been achieved, this was more subdued than in recent years.
Unadjusted operating profit for the year was £47.3m (2016: £171.1m). Earnings per share before intangible asset expenses and exceptional items were 24.4p (2016: 27.7p), with the year-on-year decrease mostly due to the previously anticipated fall in operating profit from its UK Rail Division. Basic, unadjusted earnings per share decreased to 5.5p (2016: 17.1p), principally due to exceptional charges relating to the Virgin Trains East Coast operation.
