9th Dec 2015 07:33
LONDON (Alliance News) - Transport operator Stagecoach Group PLC on Wednesday said its pretax profit dipped in the first half despite higher revenue, and it issued a cautious outlook for the second half, downgrading its full-year guidance.
The FTSE 250-listed company said its pretax profit for the half to the end of October fell to GBP90.8 million from GBP98.3 million, mainly due to higher one-off financing charges in the half. Stripping out the one-offs, pretax profit rose to GBP121.5 million from GBP108.6 million.
Revenue rose to GBP1.97 billion from GBP1.55 billion, mainly due the inclusion of revenue from the Virgin Trains East Coast franchise, which kicked off in March and in which Stagecoach has a 90% stake. The group's bus and rail operations in the UK were solid, but its US coach business continued to take a hit from low fuel prices, which has encouraged potential passengers to use their own cars instead.
Stagecoach will pay an interim dividend of 3.5 pence per share, up from 3.2p a year earlier.
But the company said it is cautious on its outlook for the second half, with recent revenue from its regional bus business in the UK coming in softer than expected and as rail and inter-city coach revenue growth slowed in the UK and Europe since mid-November. This has resulted in Stagecoach "modestly" downgrading its adjusted earnings per share guidance for the full year.
"Overall, the group is in good financial shape and we were pleased to have put new bond financing arrangements in place earlier this year. Challenges remain in our sector in the short-term but the underlying strength of our businesses across the UK, continental Europe and North America, means we are well placed to drive value for our customers and investors," said Stagecoach Chief Executive Martin Griffiths.
By Sam Unsted; [email protected]; @SamUAtAlliance
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