8th Dec 2021 15:05
(Alliance News) - Stagecoach Group PLC on Wednesday posted interim results that show it is no slow horse in a potential combination with public transport peer National Express Group PLC.
Reporting strong interim results, Stagecoach said it is confident in continuing to operate on its own, as UK travel demand picks up.
Perth, Scotland-based Stagecoach said it remains in discussion with Birmingham, England-based National Express about a potential merger of the UK's two largest transport providers.
The deadline for National Express to make a takeover offer for Stagecoach has been moved back to Tuesday next week.
"Regardless of the outcome of those discussions, we see a positive future for our business," Stagecoach said.
Chief Executive Martin Griffiths added: "We continue to see a positive outlook for our bus, coach and tram services, whether as a standalone business or as part of a combined future group. Greener and smarter public transport is central to delivering government ambitions around decarbonisation, levelling up of communities, driving economic recovery, and securing better health outcomes for citizens."
Stagecoach said pretax profit multiplied to GBP31.1 million in the six months to October 30 from GBP5.4 million a year prior. This was on revenue of GBP579.4 million, improved 27% from GBP454.6 million.
Peel Hunt said the results were "considerably ahead of our expectations", with underlying operating profit of GBP32.9 million versus the broker's forecast of GBP20.1 million. This was due to better revenue than expected in all divisions and a much higher margin in regional bus operations than Peel Hunt expected.
Stagecoach said the growth in revenue reflects recovering passenger demand across its regional bus and tram services as pandemic-related restrictions have eased.
The company did not declare an interim dividend, unchanged from a year before, but said it was planning to reinstate payouts when supported by "appropriate" profit and cash flow generation.
Stagecoach said its outlook for the current year remained unchanged and its long-term outlook is positive, arguing its services are central to delivering government ambitions for decarbonisation.
Back in October, suitor National Express said it expects underlying pretax profit to in line with expectations in 2021. Revenue reached 83% of 2019 levels in the third quarter ended September 30, up from 76% in the second quarter.
Stagecoach shares were down 1.8% at 75.30 pence each on Wednesday afternoon in London. National Express was down 3.9% at 231.20p. National Express has a market capitalisation of GBP1.40 billion, versus GBP408 million for Stagecoach.
By Abby Amoakuh; [email protected]; and Tom Waite; [email protected]
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