12th Feb 2019 08:29
LONDON (Alliance News) - Stagecoach Group PLC on Tuesday said subsidiary East Midlands Trains Ltd has agreed on a short-term rail franchise with the UK Department for Transport, from March 3 to August 18.
Shares in the FTSE 250 public transport group were up 1.4% at 155.50 pence on Tuesday.
Stagecoach is the existing operator of the route. It said the UK government department has the discretion to extend the new franchise beyond August 18 by up to 24 weeks.
It said East Midlands Trains will focus on ensuring readiness for the new franchise, including helping to put in place plans for extra seats from 2020.
Stagecoach said there would be continued investment in trains and stations. It noted that smart ticketing - whereby the ticket is stored on a microchip instead of printed on a paper ticket - will be rolled out in March.
Under the new contract, revenue risk is expected to sit mainly with the Department of Transport, and East Midlands Trains is expected to make a modest profit, Stagecoach said.
"East Midlands Trains remains the UK's most punctual long distance railway, a position it has held for the last ten years. Last year saw East Midlands Trains work with Network Rail to successfully deliver a GBP200 million re-signalling and upgrade project at Derby," Stagecoach said in a statement.
"Over the last 11 years, customers have benefited from millions of pounds of investment to improve services, whilst taxpayers have benefited from substantial premium payments to government," Stagecoach added.
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