Yahoo Finance Robust rail performance outweighs weak bus numbers at Stagecoach
Rising UK rail revenues offset poor bus performance at transport company Stagecoach, which remained tight-lipped about the forthcoming loss of a key rail franchise.
The group’s UK rail division, which includes its 90pc stake in the Virgin Train East Coast franchise, saw like-for-like sales rise 1.6pc for the 44 weeks to the end of March. The Virgin Rail West Coast franchise, in which Stagecoach owns a 49pc stake, produced above industry-average sales to grow 5.3pc for the same period.
But management did not comment in its pre-close trading statement about the announcement earlier this week that it had lost control of the South West Trains franchise after more than two decades in control.
It lost the contract to a joint venture between UK-based rival FirstGroup and Hong Kong’s MTR.
The performance of the rail division was clearly a relief to investors as the shares rose more than 4pc over the course of the day to close at 207.7p in spite of weak performance across its bus divisions.
Total like-for-like passenger journeys fell by 1.7pc in its regional bus division as weak economic growth in parts of the UK continued to dog the business. In London, revenue fell 0.9pc compared to the prior year.
In North America, trading in its Megabus.com inter-city coach business improved, but low fuel prices continue to stifle demand, pushing like-for-like revenue down 2.2pc for the 10 months ending February 28.
But management said revenue per vehicle mile was up 2.8pc, suggesting that a rescheduling of buses onto more popular routes could have helped.
Liberum transport analyst Gerald Khoo said the year-to-date figures were "generally slightly stronger" than those reported in the first half.
"This implies a relatively stronger performance in the intervening 18 weeks," he said.
"We are reluctant to call an inflexion point based on such limited data, with the potential for a variety of distortions. Growth rates also remain very weak in absolute terms."
