Stagecoach hikes half year revenue

FTSE 250 public transport firm Stagecoach said like-for-like revenue grew 5.9 per cent in the half year to October and expects revenue growth in the second half to be 'relatively modest'.

Total operating profit, before intangible asset expenses and exceptional items, for the six months to October 31st climbed 33.7% to £142m while revenue for the period increased to £1.403bn from £1.293bn in 2011.

Earnings per share surged 66.3% to 16.8p after profit growth from its bus operations and as its rail operations were boosted by revenue at East Midlands Trains.

Stagecoach, which runs Virgin Rail with Richard Branson's Virgin and is the current operator of the West Coast rail network franchise, said revenue at UK rail rose 6.6% to £599.9m in the last six months.

UK bus revenue slipped 0.6% to £116.4m while revenue at its North American division rose 19.8% to £316.4m.

Chief Executive Sir Brian Souter commented: "In the UK, we have achieved further growth in our regional bus operations and we continue to make good progress at our contracted London bus business. Passenger revenue growth remains good on our UK rail networks and we have further developed the alliance with Network Rail at South West Trains."

"We expect revenue growth in the second half of the financial year ending 30 April 2013 to remain relatively modest, as the organic growth in commercial revenue is partially offset by pressure on concessionary, tendered and contract revenue."

Stagecoach said it remains positive on the prospects for its regional bus operations and says the division is well placed to deliver some growth in operating profit in the year ending April 30th 2013.

"Our bus operations in the UK have proved robust and continued to perform well during weak macroeconomic conditions and a period of downward pressure on Government spending."

It sees good potential to grow its transport operations in the UK and North America, and believes the outlook is positive.

Underlining its confidence in future trading, the interim dividend has been lifted 8.3% to 2.6p.

CJ