West Coast services help to bolster Virgin Rail
Half year profits have fallen at Virgin Rail Group despite a strong performance from the West Coast Mainline service operated by the company on behalf of the Department for Transport.
In the six months to October 28, 2017, the service saw revenues grow to £288.5m (H1 2016: £280.1m), however, profit after tax declined from £13.9m to £12.1m.
Stagecoach Group, which owns a 49% stake in VRG, said the reduction in profit reflected a lower rate of revenue growth being more than offset by cost increases and the payments it has to make to the DfT.
Stagecoach said it was also hopeful of securing contract extensions with the DfT.
In a statement to accompany its interims, Stagecoach said the although VRG’s operating profit had fallen slightly year-on-year, its West Coast franchise – which is celebrating its 20th anniversary – continued to perform well, with like-for-like revenue growth of 3% during the period.
“That good performance continues to benefit taxpayers through profit share payments by the business to the Department for Transport,” it said.
One of the strongest elements of the West Coast service was the Liverpool to London route, which achieved new passenger records.
The company also said sales of digital tickets had more than trebled in a year, with around 20% of Virgin Trains customers now choosing this form of ticket on the West Coast route.
Stagecoach chief executive, Martin Griffiths, said: “In UK rail, we are working with the Department for Transport towards new contracts at Virgin Trains East Coast and Virgin Trains West Coast. Our East Midlands Trains franchise has been extended through to March 2019, with the prospect of us agreeing a further direct award franchise from March 2019, and we are part of shortlisted bids for new South Eastern and West Coast Partnership franchises.”