Stagecoach on the road to meet full year expectations

Stagecoach Group has seen strong growth across its UK operations in the first half of the year.

The FTSE 250 transport operator posted a trading update on Wednesday for the 24 weeks to 17 October ahead of a series of meetings with analysts.

The company’s rail businesses led the pack, with its joint venture Virgin Rail Group reporting 8.7% revenue growth.

UK Rail also saw 5.8% like for like revenue growth, excluding its new joint venture Virgin Trains East Coast.

Its operating profit forecast for the division has also been revised up to reflect its good cost control and clarity around the terms of the new East Midlands Trains franchise.

UK Bus revenues were also up 1% in the regions mainly from income received directly from passengers, however due to local authorities reducing spending on supported services, revenue from tendered and school services provided under contract has continued to decline.

In London, revenue is up 1.4% and trading is consistent with expectations, but growth continues to be impacted by congestion resulting from road works, which affects the business’ Quality Incentive Income based on operational performance.

However the fall in fuel prices impacted Stagecoach’s North America operations, with like-for-like revenue at megabus.com North America in the five months to 30 September down 5.9%. That drove its overall North America revenues down 5.6%.

The company said it believes it will meet its full year expectations.