28th Sep 2016 06:47
LONDON (Alliance News) - Rail and bus services operator Stagecoach Group PLC on Wednesday maintained its guidance for its current financial year amid mixed trading in its divisions.
The FTSE 250-listed group said like-for-like revenue declined 1.9% year-on-year in its regional UK bus operations in the 16 weeks to August 20, while like-for-like London bus revenue slipped 0.9%.
UK regional bus passenger volumes were weaker in the period, the group said, attributing the decline to softer underlying economic conditions in the UK regions and sustained lower fuel prices, which encourages potential passengers to take their own cars rather than public transport.
In the UK London bus arm, Stagecoach has seen a small net reduction in contracts with Transport for London, the body which handles public transport in the capital, but said it remains steadfast in its strategy of bidding only for contracts with sustainable margins.
Stagecoach said like-for-like revenue in its North America arm declined 3.3% in the four months to the end of August from a year before. Trading for the Megabus coach business in the US has continued to suffer from lower fuel prices and from heightened competition from car and air services, Stagecoach said.
More positively, like-for-like revenue in Stagecoach's UK rail business increased 1.7% year-on-year in the 16 weeks to August 20, while like-for-like revenue from its Virgin Rail Group venture increased 4.7%.
Despite this growth, Stagecoach said the UK rail industry has seen revenue growth slow, and the outlook for the industry remains uncertain at present. As it has previously said, this reduced growth rate is likely due to weakening consumer confidence, increased terror concerns and, once again, lower fuel prices.
Stagecoach maintained its current expectations for its financial year to April 29, 2017. It will publish interim results on December 7.
By Sam Unsted; [email protected]; @SamUAtAlliance
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