Virgin Rail owner on track for full year profits

BUS and train operator Stagecoach, joint owner of West Coast main line operator Virgin Rail, has said it remains on track to meet its full year profit expectations and continues to trade well.

In an interim management statement covering the period since April 30, the firms said it had seen like-for-like revenue growth in each of its main businesses.

In the 12 weeks to July 24, UK Bus was up 2%, UK Rail 8.4% and Virgin Rail Group 11.1%. Its North America business rose 12.7% in the three months to July 31.

The company said its financial position remained strong and it has significant committed, undrawn bank facilities. The company has also announced proposals to return approximately £340m to shareholders.

During the period, the Competition Commission announced the provisional findings of its Local Bus Services Market Inquiry.  The commission is not proposing any fundamental change to the regulatory structure of the industry and has ruled out both price controls and forced divestments of bus operations.

The group also said it was also confident that Virgin would get a nine-month extension on its West Coast rail franchise. The franchise is due to end on March 31 next year, but Stagecoach said it was in discussions with the Department of Transport and was hopeful of an agreement extending this to December 8, 2012.

Separately, it said Virgin Rail Group continued to develop its bid for a new West Coast Rail franchise.  The new franchise is due to start on December 9, 2012 and run until March 2026, with an option for it to be extended by up to 20 months.

In outlook for the group said it remained positive and its expectations were consistent with those set out in its annual report for the year ended April 30, 2011.
 
For latest Stagecoach share price click here