PROFITS at West Coast Main Line operator Virgin Rail Group (VRG) have taken a small dip for the first half of the year.
The firm saw year-on-year operating profit fall from £13.7m to £12.2m for the six months to October 31, 2011, while profit after tax fell from £10m to £9.1m.
These falls came despite a 10.4% rise in revenue from £195.5m to £216m, said Stagecoach today, the firm which jointly owns VRG with Virgin Management.
Like-for-like revenues climbed from £195.4m to £213.6m while operating margins dropped from 7% to 5.6%.
Stagecoach said in a statement: “Virgin Rail Group has continued to grow its business and leisure base on the West Coast franchise.
“The operating margin of 5.6% is lower….mainly because the increase in the premia payments payable by VRG to the Department for Transport was proportionately higher than the growth in passenger revenue.
“We have been disappointed over recent months by the deterioration in the performance of the infrastructure on the West Coast Main Line.
“VRG continues to press Network Rail for changes that will deliver better, more consistent infrastructure performance to reverse the recent decline in train punctuality.”
Virgin’s franchise for the WCML has been extended to December 8, 2012, which includes management of the introduction of more than 100 new Pendolino train carriages, which it says will deliver an extra 28,000 seats a day.
“We expect the group’s share of VRG’s profit after tax for the extension period from 1 April 2012 to 8 December 2012 to be below £10m,” it added.
VRG has pre-qualified to bid for the new West Coast rail franchise, which will run until March 2026, with an option to be extended by up to 20 months.
The Invitation to Tender document is expected to be published by the DfT early in 2012.
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