3rd Oct 2019 08:18
(Alliance News) - Stagecoach Group PLC on Thursday reported unchanged full-year expectations and said that a case against the UK transport secretary will be heard at the High Court early next year.
The company's subsidiary Stagecoach East Midlands Trains Ltd - which currently operates the East Midlands franchise - was disqualified from bidding for the franchise in the new auction, with the Department for Transport announcing in early April it had awarded the franchise to rival Abellio.
Stagecoach said: "We are proud to have operated the franchise for 12 years and are most grateful to all of our employees and partners who have been involved in delivering our transformation of the East Midlands rail network.
"We continue to pursue our claims against the Secretary of State for Transport regarding his decisions to disqualify us from three rail franchise competitions. The three cases are due to be heard in the High Court in early 2020."
The FTSE 250 firm added that alongside its joint venture partner Virgin Trains, it will work to ensure an orderly handover of the East Midlands franchise.
Turning to its non-rail operations, Stagecoach said its London bus segment has performed positively so far in 2019 and quality incentive contract income has been higher than expected.
The company explained: "We are also encouraged with our performance on current year tenders for Transport for London contracts, and believe our bidding strategy will support the long-term sustainability of the business."
In the 20 weeks to September 14, UK Bus division's like-for-like revenue increased by 1.0%, Stagecoach said, however, the growth was lower than it anticipated. The company said it was hampered by poorer weather in summer 2019, compared with 2018, and re-signalling work in Derby, East Midlands.
Stagecoach said its adjusted earnings per share expectations for the year ending May 2020 are unchanged. The firm will release its first half results for the six months to October 25, on December 11.
The company launched a share buyback programme in April, with intention of repurchasing no more than GBP60 million worth of shares. As of the market close on Wednesday, Stagecoach has repurchased 21.8 million shares at a cost of roughly GBP28.5 million.
Shares in Stagecoach were 0.7% lower at 130.80 pence each in London on Thursday morning.
By Eric Cunha; [email protected]
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