Final Results

25th Jun 2008 07:00



25 June 2008

Stagecoach Group plc - Preliminary results for the year ended 30 April 2008

Highlights

•	Strong performance delivers value to shareholders
-	Revenue from continuing businesses up 17.2% at £1,763.6m
-	73.5% increase in earnings per share+ to 20.3p
-	Full year dividend up 31.7% at 5.4 pence
-	63.0p per share return of value to shareholders in May/June 2007
-	Net debt* - £319.7m

•	Increased investment in bus and rail services

•	Sector-leading growth at UK Bus
-	Sixth successive year of organic passenger volume growth - like-for-like* volumes up 3.6%
-	Like-for-like revenue up 7.5%
-	Significant margin* enhancement, up to 14.8% from 12.2%
-	Innovative products, strong marketing and competitive fares drive growth

•	Excellent financial and operating performance at UK Rail
-	Strong passenger volume and revenue growth at South Western and East Midlands Trains
-	South West Trains - growth in commuter and leisure revenue
-	East Midlands Trains - strong start to new franchise

•	Performance objectives in North America achieved ahead of schedule
-	Operating margin up from 7.9% to 10.1%, excluding megabus.com
-	Like-for-like revenue up 4.6%
-	Expansion of budget inter-city coach service, megabus.com, in North America

•	Growth at Virgin Rail Group
-	Continued strong revenue growth on West Coast franchise
-	Further growth prospects from December 2008 timetable, requiring consistently reliable infrastructure

+	excluding intangible asset expenses and exceptional items (refer to definition of exceptional items contained in note 20 to the preliminary financial information)
*	see definitions in note 20 to the preliminary financial information

Financial summary

Year ended 30 April	Results excluding intangible asset expenses and exceptional items		Reported results
	2008	2007	2008	2007
Revenue (£m)	1,763.6	1,504.6	1,763.6	1,504.6
Total operating profit (£m)	205.3	161.3	192.3	180.9
Disposal (losses)/ gains (£m)	-	-	(1.4)	2.5
Net finance (charges)/income (£m)	(30.9)	0.7	(23.6)	0.7
Profit before taxation (£m)	174.4	162.0	167.3	184.1
Earnings per share (pence)	20.3p	11.7p	34.6p	25.4p
Proposed final dividend (pence)	4.05p	2.9p	4.05p	2.9p
Full year dividend (pence)	5.4p	4.1p	5.4p	4.1p

Commenting on the results, Chief Executive, Brian Souter said: 

"Stagecoach Group has delivered strongly on its growth strategy, attracting more people to its high-quality bus and rail services in the UK and North America. We believe there are growing signs of a fundamental positive shift in customer attitudes towards public transport, driven by increasing road congestion, rising fuel costs and concern about climate change.

"We are leading the sector in offering customers greener, smarter travel to reduce their carbon footprint. In the UK, our bus division has achieved six successive years of organic passenger volume growth and we have expanded our regional bus operations through targeted bolt-on acquisitions. We have strengthened our position as a leading UK rail operator, generating strong revenue growth, winning new contracts and offering consistently high quality of service to our customers. In North America, we are encouraged by the continuing strong performance of our business and we have achieved our objective of an improved operating margin ahead of schedule.

"We have again delivered strongly for our shareholders, raising the proposed dividend for the year by nearly 32%. I am pleased to report that we have made a good start to the new financial year and trading is in line with our expectations. We look forward to further growth."

Enquiries to: 

Martin Griffiths, Stagecoach Group +44 (0) 1738 442111

Steven Stewart, Stagecoach Group +44 (0) 1738 442111 or +44 (0) 7764 774680

John Kiely, Smithfield +44 (0) 20 7360 4900

Notes to Editors:

High-resolution photographs are available to the media free of charge at: www.newscast.co.uk (telephone +44 (0) 207 608 1000).

Stagecoach Group is a leading international public transport company with bus and rail operations in the UK and North America. The Group employs around 30,000 people and runs around 12,000 buses and trains.

  Chairman's statement

I am delighted to report that Stagecoach has delivered on its strategy with another year of strong growth in both its bus and rail operations. 

The Group has capitalised on the positive environment for public transport and the success of our market-leading services has provided further excellent returns to our shareholders, with a 31.7% increase in the proposed dividend for the year ended 30 April 2008. Earlier in the financial year, we completed the return of approximately £690m to shareholders equivalent to 63.0p per share in addition to the regular dividend payments.

Passenger volume growth has been strong across the Group as more people get on board our high-quality bus, coach, train and tram services. A combination of new ideas, effective partnerships, innovative marketing and significant investment to further enhance the quality of our services for our customers is helping to drive growth across the Group.

Our UK Bus division has performed well, generating further organic growth and setting the benchmark for good value, easy-to-use bus networks. In UK Rail, we have benefited from close cost control and a renaissance on the railways, as well as the addition of East Midlands Trains to our portfolio. Stagecoach is now Britain's biggest tram operator, having been awarded a 10-year contract to run and maintain Manchester Metrolink. We have been encouraged by the performance of our North American division, which has achieved further revenue and profit growth. 

Group revenue from continuing operations for the year ended 30 April 2008 was up 17.2% at £1,763.6m (2007: £1,504.6m). Operating profit from continuing operations before intangible asset expenses and exceptional items* was 27.3% higher at £205.3m (2007: £161.3m). Earnings per share before intangible asset expenses and exceptional items were up 73.5% at 20.3p (2007: 11.7p). In addition, there were net exceptional gains of £25.8m (2007: £169.6m) before tax and £113.9m (2007: £160.9m) after tax. 

We are proposing a final dividend of 4.05p per share (2007: 2.9p), giving a total dividend for the year of 5.4p (2007: 4.1p). This partly reflects a rebasing of the dividend rate in light of the substantial growth in earnings per share. Moving forward, we plan to continue to grow the dividend rate progressively. The proposed final dividend is payable to shareholders on the register at 29 August 2008 and will be paid on 1 October 2008. Going forward and subject to no significant changes in circumstances, we intend to set the interim dividend per share each year at approximately one-third of the preceding final dividend per share.

I would again like to thank our hard-working employees across our operations who ensure we meet the high expectations of our customers every day.

While it is still early, the current financial year to 30 April 2009 has started well and trading across the Group is in line with our expectations. The Board is confident in the future prospects for the Group and we believe the combination of increased road congestion, rising public concern about environmental matters and higher fuel prices will further boost demand for public transport. We continue to focus closely on controlling our cost base and, while we remain mindful of the cost impact of higher fuel prices and the general weaker macroeconomic outlook, we are encouraged by the significant potential for further modal shift from the car to bus and train travel.

Robert Speirs

Chairman 25 June 2008

  

* Exceptional items are defined in note 20 to the preliminary financial information.

 

 

Chief Executive’s review

 

Financial overview

Stagecoach Group has achieved continued strong financial and operational performance for the year ended 30 April 2008.

Reported revenue by division (excluding the discontinued London bus operations from the comparative year figures) is summarised below:

REVENUE	2008	2007	Currency	2008	2007	Growth
	£m	£m		Local currency (m)		%
Continuing Group operations
UK Bus	743.9	690.4	£	743.9	690.4	7.7%
North America - excluding megabus.com and closed units	236.3	236.3	US$	474.3	451.4	5.1%
North America - megabus.com	5.6	2.4	US$	11.3	4.7	140.4%
North America - closed units	Nil	4.0	US$	Nil	7.5	(100.0)%
UK Rail	777.8	571.5	£	777.8	571.5	36.1%
Total Group revenue	1,763.6	1,504.6

Reported operating profit by division (excluding the discontinued London bus operations from the comparative year figures) is summarised below:

OPERATING PROFIT	2008		2007			2008	2007
	£m	% margin	£m	% margin	Currency	Local currency (m)
Continuing Group operations UK Bus	109.9	14.8%	84.5	12.2%	£	109.9	84.5
North America - excluding megabus.com, including closed units	23.9	10.1%	19.1	7.9%	US$	48.0	36.6
North America - megabus.com	(2.9)	(51.8)%	(1.0)	(41.7)%	US$	(5.8)	(2.0)
UK Rail	59.1	7.6%	58.8	10.3%	£	59.1	58.8
Group overheads	(13.0)		(11.1)
Restructuring costs	(4.3)		(3.2)
	172.7		147.1
Joint ventures - share of profit after tax
Virgin Rail Group	32.2		13.5
Citylink	0.8		0.9
New York Splash Tours LLC	(0.4)		(0.2)
Total operating profit before intangible asset expenses and exceptional items	205.3		161.3
Intangible asset expenses	(13.0)		(14.7)
Exceptional items	Nil		34.3
Total operating profit: Group operating profit and share of joint ventures' profit after taxation	192.3		180.9

We have achieved a strong set of results across the Group and I believe we are starting to see a fundamental shift towards public transport.

Increasing road congestion in our towns and cities, coupled with growing evidence of changing customer behaviour as a result of environmental concerns, has been a positive driver for the development of our bus, coach, train and tram businesses.

A growing number of customers are now making more intelligent use of the car and seeking out greener, smarter travel options to reduce their carbon footprint. Our innovative, partnerships and customer service have grown the market for sustainable transport.  

UK Bus

Revenue from our continuing UK Bus operations increased by 7.7% to £743.9m (2007: £690.4m). Like-for-like revenue growth* was 7.5%. Operating profit* was £109.9m (2007: £84.5m). Operating margin was 14.8% compared to 12.2% in 2007. The improvement in operating margin reflects the continued strong revenue growth, relatively stable year-on-year fuel costs, returns on additional pension contributions and a continued focus on cost control.

Stagecoach is continuing to lead the transport sector in attracting more passengers to bus travel. We have delivered further revenue and organic passenger growth at our UK Bus Division in both metropolitan areas and shire counties. Overall estimated like-for-like passenger volumes in the 12 months were 3.6% higher than the equivalent prior year period. We estimate that underlying full fare passenger volume growth was around 2.9% with the remaining growth coming from concessionary travel schemes.

Stagecoach is continuing to invest significantly in its local bus fleets to sustain and grow its profitable, cash generative UK bus business. We have placed the first orders of a planned £71m investment in more than 580 new buses for delivery during the year to 30 April 2009. Vehicle manufacturers Alexander Dennis, Optare, MAN, Plaxton, Scania and Volvo will supply the latest Stagecoach orders. We are investing in greener bus technology to meet European emissions standards more than a year ahead of schedule. More than 220 buses, costing around £30m, will be fitted with state-of-the-art Euro 5 engines.

In Scotland and Wales, we continue to work with the devolved administrations to successfully deliver national concessionary fares schemes. Stagecoach is also working with local authorities in England to deliver the Government's commitment to free local bus travel for senior citizens and people with disabilities. We believe it is crucial that these schemes are fully funded and bus operators are properly reimbursed in line with the legislation.

 

* see definitions in note 20 to the preliminary financial information

North America

Revenue from North America for the year was US$485.6m (2007: US$463.6m). On a like-for-like basis, revenue was up by 4.6%. Operating profit was US$42.2m (2007: US$34.6m), resulting in an operating margin of 8.7%, compared to 7.5% the previous year. Converted to sterling, revenue for the year was £241.9m (2007: £242.7m) and operating profit for the year was £21.0m (2007: £18.1m). Excluding the early-stage North American megabus.com operations, which reported an operating loss of US$5.8m (2007: US$2.0m) on revenue of US$11.3m (2007: US$4.7m) for the year, the operating margin was up from 7.9% to 10.1%.

Despite a challenging economic environment, we have achieved further like-for-like revenue growth in our operations in the United States and Canada and met our objective of a 10% operating margin (excluding megabus.com) a year ahead of plan. We have focused closely on strong operational delivery, providing a high quality and safe service, effective marketing of our core scheduled and leisure services, and winning and retaining contract business. 

 

We have continued to invest in the quality of our fleet of vehicles to support our growth strategy in North America. 

megabus.com, our market-leading budget inter-city coach service, has now carried more than 1 million passengers in North America since we launched in April 2006. From May 2008, megabus.com operations have been extended to the east coast, with 36 daily departures from New York to Boston, Washington, Philadelphia, Baltimore, Buffalo, Atlanta City and Toronto. We are now focused on our successful Midwest network and new Northeast routes. Significant numbers of passengers have been attracted from the car, budget airlines, the train and competing coach operators and we believe there is significant potential to develop the brand. We have invested US$10m in America's first inter-city double-decker coaches for megabus.com and the fleet of 17 new vehicles entered service in January 2008.

UK Rail

The Group's UK Rail division has had another excellent year. Revenue from our UK Rail subsidiaries for the year ended 30 April 2008 was up by 36.1% to £777.8m (2007: £571.5m), reflecting strong organic revenue growth and the first contributions from East Midlands Trains and Manchester Metrolink. Like-for-like revenue was up by 13.6% to £649.3m (2007: £571.5m). Operating profit was £59.1m (2007: £58.8m), giving an operating margin of 7.6% (2007: 10.3%). This reduction in operating margin was expected and relates to the operating margin of the South Western franchise being below that of the former South West Trains franchise. Absolute operating profit for the UK Rail division has, however, increased with the first contribution from the new East Midlands Trains franchise.

Rail bid costs of £3.7m (2007: £13.0m) were expensed during the year in arriving at the UK Rail operating profit of £59.1m (2007: £58.8m). £1.0m (2007: £0.3m) of start-up costs and mobilisation costs associated with new rail franchises were capitalised in the year where the costs met the criteria for capitalisation specified in the relevant accounting standards.

South Western

Stagecoach Group began operating the new 10-year South Western franchise, which is made up of the South West Trains and Island Line networks, in February 2007. Management is fully focused on delivery of our commitments to passengers, Government and our shareholders.

We have had an excellent first full year of the new franchise in both commuting and leisure markets. Passenger volumes at South West Trains are continuing to grow strongly and were up 5.7% in the year. 

South West Trains' operational performance continues to be amongst the best achieved by train operating companies in London and the South East, with more than 92% (as measured by the Department for Transport's Passenger Performance Measure, "PPM") of trains arriving on time.

  

East Midlands Trains

We are delighted to have now taken over the East Midlands rail franchise, which started in November 2007. East Midlands Trains operates main line train services running to London St Pancras and the regional rail services in the East Midlands area. Our plans include significant investment in station and train improvements and closer partnership with Network Rail to improve train performance. We look forward to working closely with local stakeholders to maximise the opportunities for growth from these rail networks and to improve the level of service to passengers.

For the period from 11 November 2007 to 30 April 2008, the revenue of East Midlands Trains when compared to the equivalent businesses under their former ownership was 9.5% higher than the corresponding prior year period and we are pleased with the financial performance of the business. Revenue growth on London services has continued to be strong and has been aided by the opening of St Pancras International Station, which is now the new terminal for Eurostar train services from the UK to continental Europe. East Midlands Trains has set up a joint online ticketing facility for Eurostar tickets and Eurostar has reported that the number of travellers from the East Midlands and Yorkshire has more than doubled in the first three months.

Supertram

Passenger volumes at Sheffield Supertram have grown by around 6% for the year to 30 April 2008 and the tram operation is now carrying nearly 15 million people a year. Revenue has grown by around 10% in the past 12 months. 

Manchester Metrolink

In July 2007, Stagecoach Group plc commenced a 10-year contract to operate and maintain the Manchester Metrolink tram network on behalf of Greater Manchester Passenger Transport Executive ("GMPTE"). Nearly 20 million passengers travel every year on the 37km Metrolink network. The contract involves managing a number of special projects sponsored by GMPTE to improve the trams and infrastructure to benefit passengers. Stagecoach will be responsible for operating tram services on the new Metrolink lines to Oldham, Rochdale, Droylsden and Chorlton, when these extensions to the network are completed during 2011/12.

Rail franchising opportunities

Stagecoach is continuing to target rail franchise opportunities where we believe we can develop high quality, value-for-money and deliverable proposals that can add value to passengers, Government and our shareholders.

The next major rail franchise opportunity in the UK is likely to be the South Central franchise, which is currently operated by Go Via, and we shall evaluate the opportunity to bid for the franchise. The Department for Transport ("DfT") has invited the submission of accreditation questionnaires by 27 June 2008. Short-listing of bidders for the franchise is expected to take place later in 2008 with a view to the successful bidder being confirmed in Spring 2009 for commencement of the new franchise in September 2009.

  

Virgin Rail Group

The Group has a 49% shareholding in a joint venture, Virgin Rail Group ("VRG"). Our share of VRG's profit after tax for the year was £32.2m (2007: £18.9m). Our share of operating profit was £41.9m (2007: £12.4m plus £5.4m exceptional gains), our share of finance income was £4.0m (2007: £3.7m) and our share of taxation charges was £13.7m (2007: £2.6m).

VRG has continued to see strong revenue growth and in addition has settled a number of contractual matters with Network Rail, all of which contributed to the strong growth in our share of profit for the year ended 30 April 2008.

VRG's operation of the CrossCountry franchise ended in November 2007 and VRG is now focused on its remaining franchise, West Coast Trains.

The West Coast Trains franchise has been expanded as a result of the restructuring of the Cross Country franchise. West Coast now has the use of a number of Super Voyager trains for the expanded network, which has been operating from December 2007.

West Coast Trains delivered like-for-like revenue growth of 11.2% for the year ended 30 April 2008, excluding the revenue from the services that were transferred from CrossCountry to West Coast Trains.

West Coast Trains has one of the highest levels of customer satisfaction of UK passenger train operators and we believe there is significant potential for further growth over the next few years with the introduction of a new timetable from December 2008. The planned new timetable should result in around 30% more train services being operated by West Coast Trains.

There is a significant risk that Network Rail will not deliver by December 2008 an upgraded railway that is acceptable to VRG and its passengers. The physical infrastructure needs to be delivered on time and be of the right quality and standard to enable Network Rail to provide a consistently safe and reliable railway. Network Rail's recent operational performance in relation to West Coast Trains has been worse than target and improved reliability is required to allow for the significant increase in train services from December 2008. We continue to monitor developments carefully.

Scottish Citylink Coaches 

Our share of Citylink's profit after tax for the year was £0.8m (2007: £0.9m). The year-on-year movement in profit partly reflects divested routes and the cost of divestment as well as the loss of an airport contract. The improvements made by our inter-city coach joint venture have marked the return of the coach as a real alternative to the train and the car. 

Total like-for-like passenger volume growth in the year was 11.0%, which we estimate represents full fare passenger growth of 5.0% with the remainder coming from growth in the concessionary travel scheme.

Following the Competition Commission's confirmation in May 2007 of its ruling that some services on the Saltire Cross network should be divested, Citylink sold a number of its Saltire Cross services to Parks of Hamilton (Coach Hirers) Limited on 4 February 2008.

  

Depreciation and intangible asset expenses

Earnings from continuing businesses before interest, taxation, depreciation, intangible asset expenses and exceptional items (pre-exceptional EBITDA) amounted to £271.9m (2007: £229.6m) including the Group's share of its joint ventures' profit after tax. Depreciation from continuing businesses for the year was £66.6m (2007: £68.3m). The income statement charge for intangible assets decreased from £14.7m to £13.0m, of which £5.1m (2007: £5.1m) related to joint ventures.

Exceptional items

During the year ended 30 April 2008, the following exceptional items were recognised:

A pre-tax gain of £2.0m in respect of the disposal of the Group's bus operations in Darlington in the UK;

A pre-tax gain of £1.3m in respect of the disposal of the Group's bus operations in Huddersfield in the UK;

A pre-tax gain of £14.9m in respect of the resolution and/or updated assessment of certain liabilities held in respect of past business disposals and litigation risks;

A gain on sale of properties of £0.3m;

£7.3m of interest income on repayments of tax to the Group;

Tax charges of £1.2m in respect of the gains referred to above;

A tax credit of £1.5m in relation to the impact of the change in the UK corporation tax rate from 30% to 28% on deferred tax balances; and

A gain of £87.8m in respect of the resolution of a number of historic tax matters with the tax authorities.

The impact of exceptional items on profit after tax is summarised below:

	2008	2007
	£m	£m
Past service adjustment - pension scheme	Nil	28.9
Gain on sale of VRG's investment in Trainline	Nil	5.4
Gain on sale of the Group's bus operations in Darlington	2.0	Nil
Gain on sale of the Group's bus operations in Huddersfield	1.3	Nil
Gain on sale of properties	0.3	3.6
Loss in respect of other disposed and closed operations	(5.0)	(1.1)
Profit for the period from discontinued operations	19.9	132.8
Interest income on repayments of tax	7.3	Nil
Exceptional items before tax	25.8	169.6
Tax on above exceptional items	(1.2)	(8.7)
Tax rate change	1.5	Nil
Resolution of historic tax matters	87.8	Nil
Exceptional items after tax	113.9	160.9

  Return of value

A return of value of approximately £690m to shareholders was completed in June 2007. This equated to 63p per ordinary share. The return of value was approved by shareholders at an Extraordinary General Meeting on 27 April 2007.

Net finance costs

Net finance costs from continuing operations, excluding exceptional items, increased from net finance income of £0.7m to net finance charges of £30.9m as a result of an increase in average net debt during the period primarily due to the return of value to shareholders. The ratio of pre-exceptional EBITDA to net finance charges was 8.8 times (2007: net finance income).

Taxation

The tax charge, excluding discontinued operations, can be analysed as follows:

	2008			2007
	Pre-tax profit	Tax	Rate	Pre-tax profit	Tax	Rate
	£m	£m	%	£m	£m	%
Excluding intangible asset expenses and exceptional items	188.1	(42.0)	22.3%	165.0	(40.8)	24.7%
Intangible asset expenses	(13.0)	2.1	16.2%	(14.7)	2.9	19.7%
Exceptional items	5.9	88.1	n/a	36.8	(8.7)	23.6%
	181.0	48.2	n/a	187.1	(46.6)	24.9%
Reclassify joint venture taxation for reporting purposes	(13.7)	13.7	n/a	(3.0)	3.0	n/a
Reported in income statement	167.3	61.9	n/a	184.1	(43.6)	23.7%

The above tax charge includes a tax credit of £1.5m attributable to the restatement of the UK deferred tax liability arising on the reduction in the UK corporation tax rate from 30% to 28%, which applies from April 2008.

In the 2007 budget, the UK Government announced its intention to abolish Industrial Buildings Allowances. As at 30 April 2008, this change was not substantively enacted in law but is expected to be enacted in the year ending 30 April 2009. If the change is substantively enacted by 30 April 2009, the estimated impact on the balance sheet would be to increase the deferred tax liability by £13.5m. This impact on the deferred tax balance would be presented as an exceptional tax charge for the year ending 30 April 2009.

Earnings per share

Overall earnings per share before intangible asset expenses and exceptional items increased by 73.5% to 20.3p, compared to 11.7p in 2007, reflecting the strong trading performance at each of our core divisions and the earnings enhancement from the return of value. Basic earnings per share increased from 25.4p to 34.6p, which includes the effect of net exceptional gains.

Fuel costs

The Group's operations as at 30 April 2008 consume approximately 328m litres of diesel fuel per annum. As a result, the Group's profit is exposed to movements in the underlying price of fuel.

The proportion of the Group's projected fuel usage that is now hedged using fuel swaps and/or fuel caps is as follows:

Year ending 30 April	2009	2010	2011
UK Bus	94.4%	50.1%	Nil
North America	75.9%	50.6%	Nil
UK Rail	76.0%	76.0%	76.0%

The Group has no fuel hedges in place for periods beyond 30 April 2011.

The Group's fuel costs include the costs of delivery and duty as well as the costs of the underlying product. Accordingly, not all of the cost varies with movements in oil prices.

Cash flows

The strong cash generative nature of the Group is once again highlighted by net cash from operating activities after tax of £325.0m (2007: £162.3m). Net cash outflows from investing activities were £41.9m (2007: inflows of £232.9m), including £3.6m (2007: £267.0m) of cash inflows from the disposal of subsidiaries and other businesses, which for the year ended 30 April 2007 primarily related to the disposal of our London bus operations.

Net funds/debt

Net debt increased from a net funds position of £186.4m at 30 April 2007 to a net debt position of £319.7m at 30 April 2008. This reflects the completion of our return of value of £693.0m (including costs) to shareholders in June 2007 and special pension contributions of £30.0m. Excluding these factors, net debt improved by £216.9m in the year ended 30 April 2008.

The Group's net debt at 30 April 2008 is further analysed below:

	Fixed rate  £m	Floating rate  £m	Total £m
Unrestricted cash	Nil	86.9	86.9
Cash held within train operating companies	Nil	142.3	142.3
Restricted cash	Nil	33.0	33.0
Total cash and cash equivalents	Nil	262.2	262.2
Bank overdrafts	Nil	(0.6)	(0.6)
Sterling bank borrowings under bi-lateral facilities*	(150.0)	(64.7)	(214.7)
US dollar bond (matures November 2009)	(168.2)	Nil	(168.2)
Sterling hire purchase and finance leases	(11.3)	(128.5)	(139.8)
US dollar hire purchase and finance leases	(10.5)	Nil	(10.5)
Canadian dollar hire purchase and finance leases	(4.0)	Nil	(4.0)
Loan notes	Nil	(36.0)	(36.0)
Preference shares	Nil	(8.1)	(8.1)
Net debt	(344.0)	24.3	(319.7)

* The split between fixed rate and floating rate sterling bank borrowings is after taking account of the effect of interest rate derivatives that synthetically convert floating rate debt to fixed rate debt.

Pre-exceptional EBITDA for the year ended 30 April 2008 was £271.9m (2007: £229.6m) giving a net debt to pre-exceptional EBITDA ratio of 1.2 times.

  

Net cash from operating activities before tax for the year ended 30 April 2008 was £267.4m (2007: £185.2m) and can be further analysed as follows:

	2008 £m	2007 £m
EBITDA of Group companies before exceptionals:
- continuing	239.3	215.4
- discontinued	Nil	7.7
Loss on disposal of property, plant & equipment	0.4	0.2
Impairment of available for sale investment	0.2	1.3
Equity-settled share based payment expense	1.7	2.0
Working capital movements	87.4	26.3
Net interest paid	(24.2)	(3.9)
Dividends from joint ventures	31.6	31.1
Net cash from operating activities before excess pension contributions	336.4	280.1
Pension contributions in excess of pension costs	(69.0)	(94.9)
Net cash from operating activities before taxation	267.4	185.2

Excluding the additional pension contributions shown in the table above, net cash from operating activities was £336.4m (2007: £280.1m).

The working capital movement of £87.4m includes the build up of working capital on the new East Midlands Trains and Manchester Metrolink businesses, where liabilities exceed non-cash current assets.

The impact of purchases of property, plant and equipment for the year on net debt was £108.7m (2007: £93.5m). This primarily related to expenditure on passenger service vehicles, and comprised cash outflows of £45.3m (2007: £44.5m) and new hire purchase and finance lease debt of £63.4m (2007: £49.0m). £9.2m (2007: £11.0m) was received from the disposal of property, plant and equipment.

Capital expenditure

Additions to property, plant and equipment for the year were:

	2008 £m	2007 £m
UK Bus
- continuing	75.2	66.7
- discontinued	Nil	0.8
North America	28.2	22.2
UK Rail	11.7	2.8
Other	0.1	0.1
	115.2	92.6

The differences between the amounts shown above and the impact of capital expenditure on net funds/debt arose from movements in fixed asset deposits and creditors, and the inception of new rail franchises. 

  

Shares in issue

The weighted average number of ordinary shares during the year used to calculate basic earnings per share was 720.6m (2007: 1,091.7m). The number of shares ranking for dividend at 30 April 2008 was 713.1m (2007: 1,094.8m), with a further 5.0m (2007: 6.2m) of ordinary shares held by employee trusts and not ranking for dividend. 

Net assets

Net assets at 30 April 2008 were £80.4m (2007: £512.3m) with the decrease primarily reflecting the return of value to shareholders that was completed in June 2007, partly offset by the strong results for the year.

Retirement benefits 

The reported net assets of £80.4m (2007: £512.3m) that are shown on the consolidated balance sheet are after taking account of net retirement benefit assets of £33.2m (2007: net obligations of £36.2m). The movement in the year includes the effect of a £30.0m special employer contribution to the main Group scheme, Stagecoach Group Pension Scheme ("SGPS"), which was paid to that scheme in June 2007.

Current trading and outlook

While it is still early, the current financial year to 30 April 2009 has started well and trading across the Group is in line with our expectations. The Board is confident in the future prospects for the Group and we believe the combination of increased road congestion, rising public concern about environmental matters and higher fuel prices will further boost demand for public transport. We continue to focus closely on controlling our cost base and, while we remain mindful of the cost impact of higher fuel prices and the general weaker macroeconomic outlook, we are encouraged by the significant potential for further modal shift from the car to bus and train travel.

Revenue in the UK Bus Division and the North America Division continues to grow and we expect this to offset fuel and other cost increases in the new financial year. In the UK Rail division, revenue continues to grow and we are focused on delivering the opportunities and commitments from each of our franchises. The financial prospects for Virgin Rail Group are good and the successful implementation of the increased services from December 2008 will be a key milestone for the UK rail industry this year.

The Group continues to generate strong cashflows and has achieved a number of years of consistent revenue and passenger volume growth. We believe our good operational performance, emphasis on safety, and strong record of innovation means we are well positioned to attract more passengers to our greener, smarter travel services.

Brian Souter

Chief Executive

25 June 2008

  CONSOLIDATED INCOME STATEMENT

		Audited			Audited
		Year ended 30 April 2008			Year ended 30 April 2007
		Performance pre intangibles and exceptional items	Intangibles and exceptional items  (note 4)	Results for the year	Performance pre intangibles and exceptional items	Intangibles and exceptional items (note 4)	Results for the year
	Notes	£m	£m	£m	£m	£m	£m
CONTINUING OPERATIONS
Revenue	3(A)	1,763.6	Nil	1,763.6	1,504.6	Nil	1,504.6
Operating costs		(1,734.5)	(7.9)	(1,742.4)	(1,571.0)	19.3	(1,551.7)
Other operating income	5	143.6	Nil	143.6	213.5	Nil	213.5
Operating profit of Group companies	3(B)	172.7	(7.9)	164.8	147.1	19.3	166.4
Share of profit of joint ventures after finance income and taxation	3(C)	32.6	(5.1)	27.5	14.2	0.3	14.5
Total operating profit: Group operating profit and share of joint ventures' profit after taxation	3(B)	205.3	(13.0)	192.3	161.3	19.6	180.9
Gain on sale of properties	4	Nil	0.3	0.3	Nil	3.6	3.6
Loss on disposed and closed operations	4	Nil	(1.7)	(1.7)	Nil	(1.1)	(1.1)
Profit before interest and taxation		205.3	(14.4)	190.9	161.3	22.1	183.4
Finance costs	6	(45.2)	Nil	(45.2)	(20.7)	Nil	(20.7)
Finance income	6	14.3	7.3	21.6	21.4	Nil	21.4
Profit before taxation		174.4	(7.1)	167.3	162.0	22.1	184.1
Taxation	7	(28.3)	90.2	61.9	(37.8)	(5.8)	(43.6)
Profit for the year from continuing operations		146.1	83.1	229.2	124.2	16.3	140.5
DISCONTINUED OPERATIONS
Profit for the year from discontinued operations		Nil	19.9	19.9	4.0	132.8	136.8
TOTAL OPERATIONS
Profit after taxation for the year attributable to equity shareholders of the parent		146.1	103.0	249.1	128.2	149.1	277.3
Earnings per share from continuing and discontinued operations
- Adjusted/Basic	9	20.3p		34.6p	11.7p		25.4p
- Diluted	9	19.8p		33.8p	11.6p		25.1p
Earnings per share from continuing operations
- Adjusted/Basic	9	20.3p		31.8p	11.4p		12.9p
- Diluted	9	19.8p		31.1p	11.2p		12.7p
Dividends per ordinary share	8
- Interim paid				1.35p			1.2p
- Final proposed				4.05p			2.9p

The accompanying notes form an integral part of this consolidated income statement.

An interim dividend of £9.5m was paid during the year ended 30 April 2008 (2007: £13.1m). A final dividend of £28.9m has been proposed for approval in respect of the year ended 30 April 2008 (2007: £20.4m).

CONSOLIDATED BALANCE SHEET

	Notes	Audited  As at 30 April 2008 £m	Audited As at 30 April  2007 £m
ASSETS
Non-current assets
Goodwill		95.5	92.8
Other intangible assets		24.7	20.9
Property, plant and equipment		652.4	599.2
Interests in joint ventures		33.9	39.1
Available for sale and other investments		1.8	1.1
Derivative instruments at fair value		11.0	Nil
Retirement benefit assets	14	51.6	16.6
Deferred tax asset		6.9	6.8
Other receivables		2.9	2.9
		880.7	779.4
Current assets
Inventories		21.3	11.7
Trade and other receivables		185.0	142.1
Derivative instruments at fair value		33.4	1.7
Foreign tax recoverable		0.1	0.3
Cash and cash equivalents		262.2	513.3
		502.0	669.1
Total assets		1,382.7	1,448.5
LIABILITIES
Current liabilities
Trade and other payables		467.2	345.9
Current tax liabilities		10.1	24.6
Borrowings		79.4	70.9
Derivative instruments at fair value		1.4	3.7
Provisions		47.2	50.7
		605.3	495.8
Non-current liabilities
Other payables		25.0	10.8
Borrowings		514.7	272.4
Derivative instruments at fair value		2.3	2.6
Deferred tax liabilities		64.6	44.1
Provisions		72.0	57.7
Retirement benefit obligations	14	18.4	52.8
		697.0	440.4
Total liabilities		1,302.3	936.2
Net assets		80.4	512.3
EQUITY
Ordinary share capital		7.0	7.0
Share premium account		8.0	179.4
Retained earnings		(363.6)	91.8
Capital redemption reserve		410.8	243.0
Own shares		(12.6)	(7.3)
Translation reserve		5.7	3.0
Available for sale reserve		0.6	Nil
Cash flow hedging reserve		24.5	(4.6)
Total equity		80.4	512.3

  CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE

	Audited  Year ended  30 April 2008 £m	Audited Year ended 30 April 2007 £m
Income and expense recognised directly in equity
Foreign exchange differences on translation of foreign operations (net of hedging)	2.7	(1.0)
Actuarial gains on Group defined benefit pension schemes	4.6	79.4
Share of actuarial (losses)/gains on joint ventures' defined benefit pension schemes	(2.1)	5.0
Net fair value gains/(losses) on cash flow hedges	54.6	(9.2)
Net fair value gains/(losses) on available for sale investments	0.6	(1.9)
	60.4	72.3
Transfers to the income statement
Cash flow hedges reclassified and reported in profit for the year	(13.8)	5.4
Tax on items taken directly to or transferred from equity
Tax on foreign exchange differences on translation of foreign operations (net of hedging)	(1.6)	(0.3)
Tax effect of actuarial gains on Group defined benefit pension schemes	(0.1)	(20.3)
Tax effect of share of actuarial losses/(gains) on joint ventures' defined benefit pension schemes	0.6	(1.5)
Tax effect of share based payments	2.7	3.8
Tax effect of cash flow hedges	(11.7)	Nil
Tax adjustment re change in UK corporation tax rate	1.3	Nil
	(8.8)	(18.3)
Net income not recognised in income statement	37.8	59.4
Profit for the year attributable to equity shareholders of the parent	249.1	277.3
Total recognised income and expense for the year  attributable to equity shareholders of the parent	286.9	336.7

CONSOLIDATED CASH FLOW STATEMENT

	Notes	Audited Year ended 30 April 2008 £m	Audited Year ended 30 April 2007 £m
Cash flows from operating activities
Cash generated by operations	11	260.0	158.0
Interest paid		(45.6)	(25.9)
Interest received		21.4	22.0
Dividends received from joint ventures		31.6	31.1
Net cash flows from operating activities		267.4	185.2
Tax received/(paid)		57.6	(22.9)
Net cash from operating activities after tax		325.0	162.3
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired		(7.3)	(0.1)
Disposals and closures of subsidiaries and other businesses, net of cash disposed of		3.6	267.0
Cash outflow in respect of inception of rail franchise		(0.5)	Nil
Purchase of property, plant and equipment		(45.3)	(44.5)
Disposal of property, plant and equipment		9.2	11.0
Purchase of intangible assets		(1.0)	(1.7)
Purchase of other investments		(0.3)	(0.4)
Disposal of other investments		Nil	0.2
Movement in loans to joint ventures		(0.3)	1.4
Net cash (outflow)/inflow from investing activities		(41.9)	232.9
Cash flows from financing activities
Issue of ordinary shares for cash		7.7	4.7
Return of value to shareholders
- Redemption and purchase of 'B' shares and 'C' shares		(397.0)	Nil
- Dividends paid on 'C' shares		(284.6)	Nil
- Costs associated with the return of value		(3.3)	Nil
Investment in own ordinary shares by employee share ownership trusts		(8.4)	(2.1)
Sale of own ordinary shares by employee share ownership trusts		3.1	0.9
Repayments of hire purchase and lease finance		(33.1)	(28.2)
Movement in other borrowings		212.8	(11.6)
Dividends paid on ordinary shares		(30.0)	(41.5)
Sale of tokens		4.4	6.8
Redemption of tokens		(6.0)	(9.1)
Net cash used in financing activities		(534.4)	(80.1)
Net (decrease)/increase in cash and cash equivalents		(251.3)	315.1
Cash and cash equivalents at the beginning of the year		512.5	198.3
Exchange rate effects		0.4	(0.9)
Cash and cash equivalents at the end of the year		261.6	512.5
Cash and cash equivalents at the end of the year comprises:
Cash and cash equivalents included within current assets		262.2	513.3
Bank overdrafts included within borrowings		(0.6)	(0.8)
		261.6	512.5

Cash and cash equivalents for the purposes of the consolidated cash flow statement comprise cash at bank and in hand, overdrafts and other short term highly liquid investments with maturities of three months or less.

Consolidated statement of changes in shareholders' equity

	Notes	Ordinary share capital   £m	Share premium account   £m	Retained earnings   £m	Capital redemption reserve £m	Own shares   £m	Translation reserve   £m	Available for sale reserve   £m	Cash flow hedging reserve   £m	Total equity   £m
Balance at 30 April 2006 and 1 May 2006		6.9	174.8	(212.1)	243.0	(6.1)	4.0	1.9	(0.8)	211.6
Profit for the year		-	-	277.3	-	-	-	-	-	277.3
Foreign exchange differences on translation of foreign operations (net of hedging)		-	-	-	-	-	(1.0)	-	-	(1.0)
Actuarial gains on Group defined benefit pension schemes		-	-	79.4	-	-	-	-	-	79.4
Share of actuarial gains on joint ventures' defined benefit pension schemes		-	-	5.0	-	-	-	-	-	5.0
Net fair value losses on cash flow hedges		-	-	-	-	-	-	-	(9.2)	(9.2)
Net fair value losses on available for sale investments		-	-	-	-	-	-	(1.9)	-	(1.9)
Cash flow hedges reclassified and reported in profit for the year		-	-	-	-	-	-	-	5.4	5.4
Tax on items taken directly to equity (for split see Consolidated statement of recognised income and expense)		-	-	(18.3)	-	-	-	-	-	(18.3)
Own ordinary shares purchased		-	-	-	-	(2.1)	-	-	-	(2.1)
Own ordinary shares sold		-	-	-	-	0.9	-	-	-	0.9
Arising on new ordinary share issues		0.1	4.6	-	-	-	-	-	-	4.7
Credit in relation to equity-settled share based payments		-	-	2.0	-	-	-	-	-	2.0
Dividends paid on ordinary shares	8	-	-	(41.5)	-	-	-	-	-	(41.5)
Balance at 30 April 2007 and 1 May 2007		7.0	179.4	91.8	243.0	(7.3)	3.0	-	(4.6)	512.3
Profit for the year		-	-	249.1	-	-	-	-	-	249.1
Foreign exchange differences on translation of foreign operations (net of hedging)		-	-	-	-	-	2.7	-	-	2.7
Actuarial gains on Group defined benefit pension schemes		-	-	4.6	-	-	-	-	-	4.6
Share of actuarial losses on joint ventures' defined benefit pension schemes		-	-	(2.1)	-	-	-	-	-	(2.1)
Net fair value gains on cash flow hedges		-	-	-	-	-	-	-	54.6	54.6
Net fair value gains on available for sale investments		-	-	-	-	-	-	0.6	-	0.6
Cash flow hedges reclassified and reported in profit for the year		-	-	-	-	-	-	-	(13.8)	(13.8)
Tax on items taken directly to equity (for split see Consolidated statement of recognised income and expense)		-	-	2.9	-	-	-	-	(11.7)	(8.8)
Own ordinary shares purchased		-	-	-	-	(8.4)	-	-	-	(8.4)
Own shares sold		-	-	-	-	3.1	-	-	-	3.1
Return of value to shareholders		-	(175.8)	(674.4)	160.6	-	-	-	-	(689.6)
Expenses associated with return of value		-	(3.3)	-	-	-	-	-	-	(3.3)
Preference shares redeemed		-	-	(7.2)	7.2	-	-	-	-	-
Arising on new ordinary share issues		-	7.7	-	-	-	-	-	-	7.7
Credit in relation to equity-settled share based payments		-	-	1.7	-	-	-	-	-	1.7
Dividends paid on ordinary shares	8	-	-	(30.0)	-	-	-	-	-	(30.0)
Balance at 30 April 2008		7.0	8.0	(363.6)	410.8	(12.6)	5.7	0.6	24.5	80.4

NOTES 

1	BASIS OF PREPARATION

These results have been prepared in accordance with International Financial Reporting Standards ("IFRS"), International Financial Reporting Interpretations Committee ("IFRIC") interpretations and with those parts of the Companies Act 1985 applicable to companies reporting under IFRS. The financial information has been prepared in accordance with IFRSs as adopted by the European Union and therefore complies with Article 4 of the EU IAS Regulation. The accounting policies adopted are consistent with those used in the last set of published financial statements with the exception of IFRIC 12 'Service Concession Arrangements' that has been adopted for the first time for the year ended 30 April 2008.

The Group has early adopted IFRIC 12 'Service Concession Arrangements' which is compulsory for accounting periods commencing after 1 January 2008. We have applied IFRIC 12 to our Manchester Metrolink business which we started operating during the year ended 30 April 2008. Accordingly there has been no prior year restatement needed on adoption of this interpretation. The impact of adopting IFRIC 12 on the current year results was not material in the context of the consolidated financial statements as a whole.

The Group has adopted for the first time IFRS 7 'Financial Instruments: Disclosures' and the new disclosures required by IFRS 7 will be provided in the Annual Report for the year ended 30 April 2008.

Where appropriate, comparative figures for the previous year have been adjusted to conform with changes in presentation. These changes have no impact on the consolidated income statement nor on consolidated net assets.

The Board of Directors approved this announcement on 25 June 2008.

2	FOREIGN CURRENCIES

The principal rates of exchange used to translate the results of foreign operations are as follows:

Principal rates of exchange	2008	2007
US Dollar:
Year end rate	1.9806	1.9999
Average rate	2.0072	1.9103
Canadian Dollar:
Year end rate	1.9947	2.2102
Average rate	2.0525	2.1738

3	SEGMENTAL ANALYSIS

The Group is managed, and reports internally, on a basis consistent with its three continuing business segments, which consist of UK Bus, North America and UK Rail. The Group's IFRS accounting policies are applied consistently, where appropriate, to each segment.

The segmental information provided in this note is on the basis of three primary segments, and gives the details for both business segments and geographical segments as follows:

Segment name	Business segment	Geographical segment
UK Bus	Coach and bus operations	United Kingdom
North America	Coach and bus operations	North America
UK Rail	Rail operations	United Kingdom

  

3	SEGMENTAL ANALYSIS (CONTINUED)

UK Bus and North America provide coach and bus services while UK Rail provides rail services.

The Group's London bus operations were disposed of during the year ended 30 April 2007. These operations were formerly part of the UK Bus segment but have been reclassified as "discontinued".

Due to the nature of the services the Group provides, the primary and secondary segments coincide.

The Group has interests in three joint ventures: Virgin Rail Group that operates in UK Rail, Citylink that operates in UK Bus and New York Splash Tours LLC that operates in North America. The results of these joint ventures are shown separately in note 3(C).

(A)

REVENUE

Due to the nature of the Group's business, the origin and destination of revenue is the same in all cases. As the Group sells bus and rail services to individuals, it has few customers that are individually "major". Its major customers are typically public bodies that subsidise or procure transport services - such customers include local authorities, transport authorities and the UK Department for Transport.

No material part of each segment's revenue shown below relates to transactions with other segments.

	Audited Year ended  30 April 2008	Audited Year ended  30 April 2007
	£m	£m
Continuing operations
UK Bus	743.9	690.4
North America	241.9	242.7
Total bus continuing operations	985.8	933.1
UK Rail	777.8	571.5
Group revenue	1,763.6	1,504.6

  

3	SEGMENTAL ANALYSIS (CONTINUED)

(B)	OPERATING PROFIT

		Audited Year ended 30 April 2008			Audited Year ended 30 April 2007
	Notes	Performance pre intangibles and exceptional items	Intangibles and exceptional items	Results for the year	Performance pre intangibles and exceptional items	Intangibles and exceptional items	Results for the year
		£m	£m	£m	£m	£m	£m
Continuing operations
UK Bus		109.9	Nil	109.9	84.5	28.9	113.4
North America		21.0	Nil	21.0	18.1	Nil	18.1
Total bus continuing operations		130.9	Nil	130.9	102.6	28.9	131.5
UK Rail		59.1	Nil	59.1	58.8	Nil	58.8
Total continuing operations		190.0	Nil	190.0	161.4	28.9	190.3
Group overheads		(13.0)	Nil	(13.0)	(11.1)	Nil	(11.1)
Intangible asset amortisation		Nil	(7.9)	(7.9)	Nil	(9.6)	(9.6)
Restructuring costs		(4.3)	Nil	(4.3)	(3.2)	Nil	(3.2)
Total operating profit of continuing Group companies		172.7	(7.9)	164.8	147.1	19.3	166.4
Share of profit of joint ventures after finance income and taxation	3(C)	32.6	(5.1)	27.5	14.2	0.3	14.5
Total operating profit: Group operating profit and share of joint ventures’ profit after taxation		205.3	(13.0)	192.3	161.3	19.6	180.9

 

  

3	SEGMENTAL ANALYSIS (CONTINUED)

(C)	JOINT VENTURES

	Audited Year ended 30 April 2008			Audited Year ended 30 April 2007
	Performance pre intangibles and exceptional items	Intangibles and exceptional items	Results for the year	Performance pre intangibles and exceptional items	Intangibles and exceptional items	Results for the year
	£m	£m	£m	£m	£m	£m
Continuing
Virgin Rail Group (UK Rail)
Operating profit	41.9	Nil	41.9	12.4	5.4	17.8
Finance income (net)	4.0	Nil	4.0	3.7	Nil	3.7
Taxation	(13.7)	Nil	(13.7)	(2.6)	Nil	(2.6)
	32.2	Nil	32.2	13.5	5.4	18.9
Goodwill charged on investment in continuing joint ventures	Nil	(5.1)	(5.1)	Nil	(5.1)	(5.1)
	32.2	(5.1)	27.1	13.5	0.3	13.8
Citylink (UK Bus)
Operating profit	1.1	Nil	1.1	1.3	Nil	1.3
Taxation	(0.3)	Nil	(0.3)	(0.4)	Nil	(0.4)
	0.8	Nil	0.8	0.9	Nil	0.9
New York Splash Tours LLC (North America)
Operating loss	(0.7)	Nil	(0.7)	(0.2)	Nil	(0.2)
Taxation	0.3	Nil	0.3	Nil	Nil	Nil
Operating loss	(0.4)	Nil	(0.4)	(0.2)	Nil	(0.2)
Share of profit of joint ventures after finance income and taxation	32.6	(5.1)	27.5	14.2	0.3	14.5

  

4	EXCEPTIONAL ITEMS AND INTANGIBLE ASSET EXPENSES

Where applicable, the Group intends to continue to highlight amounts before intangible asset expenses and exceptional items as well as clearly reporting the results in accordance with IFRS. Exceptional items are as defined in note 20.

The items shown in the column headed "Intangibles and exceptional items" on the face of the consolidated income statement for the year ended 30 April 2008 can be further analysed as follows:

	Audited
	Year ended 30 April 2008
	Exceptional items £m	Intangible asset expenses £m	Intangibles and exceptional items £m
Operating costs
Amortisation of intangible assets	Nil	(7.9)	(7.9)
Share of profit of joint ventures
Goodwill charge on investment in joint ventures	Nil	(5.1)	(5.1)
Gain on sale of properties	0.3	Nil	0.3
Loss on disposed and closed operations	(1.7)	Nil	(1.7)
Finance income	7.3	Nil	7.3
Profit for the period from discontinued operations	19.9	Nil	19.9
Intangible asset expenses and exceptional items	25.8	(13.0)	12.8
Tax effect of intangible asset expenses and exceptional items	(1.2)	2.1	0.9
Exceptional tax credit	87.8	Nil	87.8
Tax rate change	1.5	Nil	1.5
Intangible asset expenses and exceptional items after taxation	113.9	(10.9)	103.0

  

4	EXCEPTIONAL ITEMS AND INTANGIBLE ASSET EXPENSES (CONTINUED)

The items shown in the column headed "Intangibles and exceptional items" on the face of the consolidated income statement for the prior year comparatives can be further analysed as follows:

	Audited
	Year ended 30 April 2007
	Exceptional items £m	Intangible asset expenses £m	Intangibles and exceptional items £m
Operating costs
Past service adjustment - pension scheme	28.9	Nil	28.9
Amortisation of intangible assets	Nil	(9.6)	(9.6)
	28.9	(9.6)	19.3
Share of profit of joint ventures
Gain on sale of Virgin Rail Group's investment in Trainline	5.4	Nil	5.4
Goodwill charge on investment in joint ventures	Nil	(5.1)	(5.1)
	5.4	(5.1)	0.3
Gain on sale of properties	3.6	Nil	3.6
Loss on disposed and closed operations	(1.1)	Nil	(1.1)
Profit for the period from discontinued operations
Gain on sale of London bus business	132.2	Nil	132.2
Gain on sale of New Zealand operations	0.6	Nil	0.6
	132.8	Nil	132.8
Intangible asset expenses and exceptional items	169.6	(14.7)	154.9
Tax effect	(8.7)	2.9	(5.8)
Intangible asset expenses and exceptional items after taxation	160.9	(11.8)	149.1

5	OTHER OPERATING INCOME

	Audited Year ended  30 April 2008	Audited Year ended 30 April 2007
	£m	£m
Miscellaneous revenue	65.4	50.3
Rail franchise support, excluding incentive payments	78.2	130.9
Rail incentive payments	Nil	32.3
	143.6	213.5

In addition to the above other operating income for continuing businesses, £Nil (2007: £1.1m) was recognised in relation to miscellaneous revenue of our disposed London bus business.

Miscellaneous revenue comprises revenue incidental to the Group's principal activity. It includes advertising income, maintenance income and property income.

Rail franchise support is the gross amount of financial support receivable from the Department for Transport ("DfT").

Rail incentive payments comprise amounts that were receivable from the DfT in respect of the operational performance of our rail companies measured against benchmarks agreed with the DfT. The incentive arrangements have changed since the previous year such that no incentive income was received for the year ended 30 April 2008 (2007: £32.3m), although performance regime amounts continue to be payable to Network Rail and such amounts are included within operating costs in the consolidated income statement.

  

6	FINANCE COSTS AND INCOME

	Audited  Year ended  30 April 2008 £m	Audited Year ended 30 April 2007 £m
Finance costs:
Interest payable and other facility costs on bank loans and overdrafts	21.6	2.4
Hire purchase and finance lease interest payable	7.5	4.4
Interest payable on bonds	12.2	11.0
'B' share dividends	0.6	Nil
Unwinding of discount on provisions	3.3	2.9
	45.2	20.7
Finance income:
Interest receivable	(14.0)	(21.3)
Interest receivable on interest rate swaps qualifying as cash flow hedges	(0.3)	Nil
Fair value gains on financial instruments not qualifying as hedges
- interest rate swaps	Nil	(0.1)
	(14.3)	(21.4)
Net finance costs/(income) before exceptional items	30.9	(0.7)
Exceptional item:
Interest receivable on tax repayments	(7.3)	Nil
Net finance costs/(income)	23.6	(0.7)

In addition to the above net finance costs/(income) for continuing businesses, £Nil (2007: £0.6m) of net finance income was recognised in relation to our disposed London bus business, included within discontinued operations.

7

TAXATION

The taxation charge comprises:

	Audited Year ended 30 April 2008			Audited Year ended 30 April 2007
	Performance pre intangibles and exceptional items	Intangibles and exceptional items	Results for the year	Performance pre intangibles and exceptional items	Intangibles and exceptional items	Results for the year
	£m	£m	£m	£m	£m	£m
Current tax:
UK corporation tax at 29.84% (2007: 30%)	1.2	2.5	3.7	21.2	(0.6)	20.6
Prior year under/(over) provision for corporation tax	1.4	(78.0)	(76.6)	(0.9)	Nil	(0.9)
Foreign tax (current year)	1.5	Nil	1.5	1.2	Nil	1.2
Foreign tax (adjustments in respect of prior years)	Nil	Nil	Nil	(0.6)	Nil	(0.6)
Total current tax	4.1	(75.5)	(71.4)	20.9	(0.6)	20.3
Deferred tax:
Origination and reversal of timing differences	25.4	(4.8)	20.6	17.0	6.4	23.4
Adjustments in respect of prior years	(1.2)	(9.9)	(11.1)	(0.1)	Nil	(0.1)
Total deferred tax	24.2	(14.7)	9.5	16.9	6.4	23.3
Total tax on profit	28.3	(90.2)	(61.9)	37.8	5.8	43.6

  

7	TAXATION (CONTINUED)

In addition to the above tax charge for continuing businesses, £Nil (2007: £1.8m) of tax charges were recognised in relation to our disposed London bus business.

8

DIVIDENDS

Dividends on ordinary shares are shown below. Dividends payable in respect of 'B' shares of £0.6m (2007: £Nil) are included as an expense in finance costs and shown separately in note 6. The one-off dividends on 'C' shares of £284.6m (2007: £Nil) are included as a movement in equity.

	Audited  Year ended  30 April 2008	Audited  Year ended  30 April  2007	Audited  Year ended  30 April 2008	Audited  Year ended  30 April  2007
	pence per share	pence per share	£m	£m
Amounts recognised as distributions in the year
Dividends on ordinary shares
Final dividend in respect of the previous year	2.90	2.60	20.5	28.4
Interim dividend in respect of the current year	1.35	1.20	9.5	13.1
Amounts recognised as distributions to equity holders in the year	4.25	3.80	30.0	41.5
Dividends proposed but neither paid nor included as liabilities in the financial statements
Dividends on ordinary shares
Final dividend in respect of the current year	4.05	2.90	28.9	20.4

The proposed final dividend in respect of the year ended 30 April 2008 is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in the financial statements. If approved, the final dividend will be payable on 1 October 2008 to shareholders on the register at close of business on 29 August 2008.

The dividends proposed or declared and the actual dividends recognised as distributions can differ slightly due to the number of shares at the balance sheet date being different to the number outstanding at the record date.

9	EARNINGS PER SHARE

Basic earnings per share ("EPS") have been calculated by dividing the profit attributable to equity shareholders by the weighted average number of ordinary shares in issue during the year, excluding any ordinary shares held by employee share ownership trusts and not ranking for dividend.

The diluted earnings per share was calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares in relation to share options and long term incentive plans. In respect of share options, a calculation was done to determine the number of ordinary shares that could have been acquired at fair value (determined based on the average annual market share price of the Company's ordinary shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of ordinary shares calculated as above is compared with the number of ordinary shares that would have been issued assuming the exercise of the share options. The difference is added to the denominator as an issue of ordinary shares for no consideration and no adjustment is made to earnings (numerator).

  

9	EARNINGS PER SHARE (CONTINUED)

On 14 May 2007, the Company issued 277,777,735 redeemable 'B' shares of 63 pence each and 823,220,972 irredeemable 'C' shares of 63 pence each at the rate of 1 'B' or 'C' share for every 1 ordinary share held. The issue of the 'B' and 'C' shares was followed by a share capital consolidation whereby shareholders received 9 new ordinary shares for every 14 existing ordinary shares held. In determining the consolidated earnings per share, no adjustment has been made to the number of ordinary shares outstanding before the event where the issue of 'B' and 'C' shares was combined with the share capital consolidation. The weighted average number of ordinary shares outstanding for the year ended 30 April 2008 has been adjusted for the reduction in the number of ordinary shares from the date on which the issue of 'B' and 'C' shares and share consolidation took place. This treatment is consistent with paragraph 29 of International Accounting Standard 33, "Earnings per share".

	Audited Year ended  30 April 2008	Audited Year ended 30 April 2007
	No. of shares million	No. of shares million
Basic weighted average number of ordinary shares	720.6	1,091.7
Dilutive ordinary shares
- Executive Share Option Scheme	3.8	7.4
- Employee SAYE Scheme	6.0	2.2
- Long Term Incentive Plan	4.4	2.3
- Executive Participation Plan	2.0	1.0
Diluted weighted average number of ordinary shares	736.8	1,104.6

	£m	£m
Profit after taxation including discontinued operations (for basic EPS calculation)	249.1	277.3
Intangible asset expenses (see note 4)	13.0	14.7
Exceptional items before tax (see note 4)	(25.8)	(169.6)
Tax effect of intangible asset expenses and exceptional items (see note 4)	(90.2)	5.8
Profit for adjusted EPS calculation	146.1	128.2

	Earnings per share  pence	Earnings per share  pence
Basic	34.6	25.4
Adjusted basic	20.3	11.7
Diluted	33.8	25.1
Adjusted diluted	19.8	11.6

  

9	EARNINGS PER SHARE (CONTINUED)

Earnings per share before intangible asset expenses and exceptional items is calculated after adding back intangible asset expenses and exceptional items after taking account of taxation, as shown on the consolidated income statement. This has been presented to allow shareholders to gain a clearer understanding of the underlying performance. The basic and diluted earnings per share can be further analysed as follows:

	Audited			Audited
	Year ended 30 April 2008			Year ended 30 April 2007
	Earnings	Weighted average number of shares	Earnings per share	Earnings	Weighted average number of shares	Earnings per share
	£m	Million	pence	£m	Million	pence
Basic
- Continuing operations	229.2	720.6	31.8	140.5	1,091.7	12.9
- Discontinued operations	19.9	720.6	2.8	136.8	1,091.7	12.5
	249.1	720.6	34.6	277.3	1,091.7	25.4
Adjusted basic
- Continuing operations	146.1	720.6	20.3	124.2	1,091.7	11.4
- Discontinued operations	Nil	720.6	Nil	4.0	1,091.7	0.3
	146.1	720.6	20.3	128.2	1,091.7	11.7
Diluted
- Continuing operations	229.2	736.8	31.1	140.5	1,104.6	12.7
- Discontinued operations	19.9	736.8	2.7	136.8	1,104.6	12.4
	249.1	736.8	33.8	277.3	1,104.6	25.1
Adjusted diluted
- Continuing operations	146.1	736.8	19.8	124.2	1,104.6	11.2
- Discontinued operations	Nil	736.8	Nil	4.0	1,104.6	0.4
	146.1	736.8	19.8	128.2	1,104.6	11.6

  

10	SHARE CAPITAL

	Audited	Audited
	As at 30 April 2008 £m	As at 30 April 2007 £m
Authorised ordinary share capital
936,428,571 (2007: 1,456,666,666) ordinary shares of 56/57 pence (2007: 12/19 pence) each	9.2	9.2

	2008		2007
	No. of shares	£m	No. of shares	£m
Allotted, called-up and fully-paid
ordinary shares of 56/57 pence (2007: 12/19 pence) each
At beginning of year	1,100,998,707	7.0	1,093,600,313	6.9
Share capital consolidation (9 for 14 shares)	(393,213,824)	Nil	Nil	Nil
Allotted to employees and former employees under share option schemes	10,360,416	Nil	7,398,394	0.1
At end of year	718,145,299	7.0	1,100,998,707	7.0

The balance on the share capital account shown above represents the aggregate nominal value of all ordinary shares in issue.

The Group operates two Employee Share Ownership Trusts: the Stagecoach Group Qualifying Employee Share Ownership Trust ("QUEST") and the Stagecoach Group Employee Benefit Trust ("EBT"). Shares held by these trusts are treated as a deduction from equity in the Group's financial statements. Other assets and liabilities of the trusts are consolidated in the Group's financial statements as if they were assets and liabilities of the Group. As at 30 April 2008, the QUEST held 384,279 (2007: 369,399) ordinary shares in the Company and the EBT held 4,600,165 (2007: 5,825,879) ordinary shares in the Company. The trusts have waived dividends on the shares they hold.

On 14 May 2007, a share capital consolidation took place that replaced every 14 existing ordinary shares with 9 new ordinary shares. The effect of this share capital consolidation changed the par value of an ordinary share from 12/19 pence to 56/57 pence.

Also, on 14 May 2007 shareholders received 1 'B' share or 1 'C' share for each existing ordinary share held. This was a means of returning cash to shareholders. The 'B' and 'C' shares issued were subsequently dealt with as follows:

A dividend of 63 pence per 'C' share was paid on 451,806,110 'C' shares, with the dividend paid to holders on 25 May 2007. These 'C' shares were then converted to deferred shares. The deferred shares have been subsequently cancelled.

Employee share ownership trusts received 6,195,278 'C' shares and waived their entitlement to dividends on such shares. These 'C' shares were then converted to deferred shares. The deferred shares have been subsequently cancelled.

253,584,435 'B' shares were redeemed at 63 pence each with the redemption proceeds paid to holders on 5 June 2007.

365,219,584 'C' shares were sold to Credit Suisse Securities (Europe) Limited for 63 pence each and the proceeds paid to holders on 5 June 2007. The 'C' shares were subsequently purchased by the Company from Credit Suisse Securities (Europe) Limited at 63 pence each and were cancelled.

  

10	SHARE CAPITAL (CONTINUED)

11,409,623 'B' shares were redeemed at 63 pence each with the redemption proceeds paid to holders on 30 November 2007.

12,783,677 'B' shares remained in issue at 30 April 2008 and may be redeemed at the option of the holder on 31 May and 30 November each year. These retained 'B' shares are entitled to receive a dividend at the rate of 70% of six month LIBOR, payable six-monthly in arrears on the par value of 63 pence per 'B' share.

The 'B' shares that remain in issue are classified as liabilities and the dividends payable on such shares are classified in the consolidated income statement within finance costs.

11	RECONCILIATION OF OPERATING PROFIT TO NET CASH FLOWS FROM OPERATING ACTIVITIES

	Audited Year ended 30 April 2008	Audited Year ended  30 April 2007
	£m	£m
Operating profit of Group companies	164.8	166.4
Operating profit of discontinued operations	Nil	5.2
Depreciation
- continuing operations	66.6	68.3
- discontinued operations	Nil	2.5
Loss on disposal of plant and equipment	0.4	0.2
Intangible asset expenses	7.9	9.6
Impairment of available for sale investment	0.2	1.3
Share based payment expense of continuing operations	1.7	2.0
Operating cashflows before working capital movements	241.6	255.5
(Increase)/decrease in inventories	(6.7)	0.5
(Increase)/decrease in receivables	(43.5)	14.9
Increase/(decrease) in payables	129.1	(2.8)
Increase in provisions	8.5	13.7
Non-cash exceptional pensions past service adjustment	Nil	(28.9)
Other differences between employer pension contributions and amounts recognised in the income statement	(69.0)	(94.9)
Cash generated by operations	260.0	158.0

During the year, the Group entered into hire purchase and finance lease arrangements in respect of new assets with a total capital value at inception of the contracts of £66.2m (2007: £51.6m). After taking account of deposits paid up-front, new hire purchase and finance lease liabilities of £63.4m (2007: £49.0m) were recognised.

  

12	RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET (DEBT)/FUNDS

	Audited	Audited
	Year ended  30 April 2008 £m	Year ended  30 April 2007 £m
(Decrease)/increase in cash	(251.3)	315.1
Cash flow from movement in borrowings	501.9	40.9
	250.6	356.0
New hire purchase	(63.4)	(49.0)
Bonus issue of preference shares	(693.6)	Nil
Hire purchase debt of acquired subsidiaries	(1.1)	Nil
Other movements	1.4	15.3
(Increase)/decrease in net debt	(506.1)	322.3
Opening net funds/(debt) (as defined in note 20)	186.4	(135.9)
Closing net (debt)/funds (as defined in note 20)	(319.7)	186.4

13	ANALYSIS OF NET FUNDS/DEBT

IFRS does not explicitly define "net funds/debt". The analysis provided below therefore shows an analysis of net funds/debt as defined in note 20. The analysis below further shows the other items classified as net borrowings in the consolidated balance sheet.

 

	Opening	Cashflows	New hire purchase/ finance leases	Preference shares issued	Preference shares liability waived	Foreign exchange movements	Acquisitions	(Charged)/ credited to income statement	Closing
	£m	£m	£m	£m	£m	£m	£m	£m	£m
Cash	479.1	(250.9)	Nil	Nil	Nil	0.4	Nil	Nil	228.6
Cash collateral	33.4	(0.4)	Nil	Nil	Nil	Nil	Nil	Nil	33.0
Hire purchase and finance lease obligations	(122.3)	33.1	(63.4)	Nil	Nil	(0.6)	(1.1)	Nil	(154.3)
Bank loans and loan stock	(37.0)	(212.8)	Nil	Nil	Nil	Nil	Nil	(0.9)	(250.7)
Bonds	(166.8)	Nil	Nil	Nil	Nil	(1.5)	Nil	0.1	(168.2)
‘B’ preference shares	Nil	681.6	Nil	(693.6)	3.9	Nil	Nil	Nil	(8.1)
Net funds/(debt)	186.4	250.6	(63.4)	(693.6)	3.9	(1.7)	(1.1)	(0.8)	(319.7)
Accrued interest on bonds	(6.6)	7.3	Nil	Nil	Nil	(0.1)	Nil	(7.3)	(6.7)
Unamortised gain on early settlement of interest rate swaps	(9.8)	Nil	Nil	Nil	Nil	Nil	Nil	4.3	(5.5)
Net borrowings (IFRS)	170.0	257.9	(63.4)	(693.6)	3.9	(1.8)	(1.1)	(3.8)	(331.9)

The net total of cash and cash collateral of £261.6m (2007: £512.5m) is classified in the balance sheet as £262.2m (2007: £513.3m) in cash and cash equivalents and £0.6m (2007: £0.8m) as bank overdrafts within borrowings. The cash collateral balance as at 30 April 2008 of £33.0m (2007: £33.4m) comprises balances held in trust in respect of loan notes of £32.2m (2007: £32.3m), £Nil (2007: £0.4m) held in Escrow in relation to the sale of businesses and North America restricted cash balances of £0.8m (2007: £0.7m). In addition, cash includes train operating company cash of £142.3m (2007: £96.2m). Under the terms of the franchise agreements, train operating companies can only distribute cash out of retained earnings.

Cash and cash equivalents includes £113.8m (2007: £Nil) of amounts deposited in money market accounts that are due to mature between 1 May 2008 and 16 June 2008.

  

14	RETIREMENT BENEFITS

The Group contributes to a number of pension schemes. The principal defined benefit occupational schemes are as follows:

• The Stagecoach Group Pension Scheme ("SGPS");

• The South West Trains section of the Railways Pension Scheme ("RPS");

• The Island Line section of the Railways Pension Scheme ("RPS");

• The East Midlands Trains section of the Railways Pension Scheme ("RPS"); and

• A number of UK Local Government Pension Schemes ("LGPS");

During the year ended 30 April 2008, both the Yorkshire Traction Company Limited Pension Plan ("YTC") and the Strathtay Scottish Omnibuses Limited Pension and Life Assurance Scheme ("SSO") were merged with SGPS. All assets and liabilities of YTC and SSO were transferred into SGPS.

The Directors believe that separate consideration should be given to RPS as the Group has no rights or obligations in respect of sections of the scheme following expiry of the franchises. Therefore, the liability (or asset) recognised for the relevant sections of RPS only represents that part of the net deficit (or surplus) of each section that the employer is obliged to fund (or expected to recover) over the life of the franchise to which each section relates. The restriction on surplus to be recognised in the LGPS plans is based on the advice of independent professionally qualified actuaries.

In addition, the Group contributes to a number of defined contribution schemes covering UK and non-UK employees.

The movements for the year ended 30 April 2008 in the net pre-tax assets/(liabilities) recognised in the balance sheet were as follows:

	SGPS £m	RPS £m	LGPS £m	YTC £m	SSO £m	Other £m	Unfunded Plans £m	Total £m
At 1 May 2007	(27.3)	4.8	1.8	(8.3)	(2.9)	(0.8)	(3.5)	(36.2)
Rail franchise changes	Nil	(4.2)	Nil	Nil	Nil	Nil	Nil	(4.2)
Merger of scheme	(11.5)	Nil	Nil	7.7	3.8	Nil	Nil	Nil
Current service cost	(10.9)	(17.7)	(2.8)	(1.2)	(0.4)	(0.1)	Nil	(33.1)
Past service adjustments	3.1	Nil	Nil	Nil	Nil	Nil	(3.0)	0.1
Curtailments	Nil	0.3	Nil	Nil	Nil	Nil	Nil	0.3
Interest cost	(32.1)	(16.9)	(13.9)	(2.7)	(0.5)	(0.1)	(0.2)	(66.4)
Expected return on plan assets	44.7	24.5	19.2	2.7	0.5	0.1	Nil	91.7
One-off employers' contributions	30.0	3.3	Nil	Nil	Nil	Nil	Nil	33.3
Other employers' contributions	18.3	17.9	4.4	1.9	0.4	Nil	0.2	43.1
Actuarial gains	13.0	7.5	(16.9)	(0.1)	(0.9)	(0.1)	2.1	4.6
At 30 April 2008	27.3	19.5	(8.2)	Nil	Nil	(1.0)	(4.4)	33.2
- Assets	27.3	19.5	4.8	Nil	Nil	Nil	Nil	51.6
- Liabilities	Nil	Nil	(13.0)	Nil	Nil	(1.0)	(4.4)	(18.4)

The net pension asset before deferred tax of £33.2m (2007: net liability of £36.2m) is classified in the balance sheet as £51.6m (2007: £16.6m) of assets and £18.4m (2007: £52.8m) of liabilities. 

  

15	CONTINGENT LIABILITIES

(i)	The following bonds and guarantees were in place relating to the Group's rail operations: Audited Audited As at 30 April  2008 £m As at  30 April  2007 £m Performance bonds backed by bank facilities - Stagecoach South Western 33.5 10.7 - East Midlands Trains 18.2 Nil - South West Trains Nil 44.3 Season ticket bonds backed by bank facilities - Stagecoach South Western 37.9 34.5 - East Midlands Trains 4.3 Nil - South West Trains Nil Nil Inter-company loan facilities and guarantees - Stagecoach South Western 25.0 25.0 - East Midlands Trains 35.0 Nil - South West Trains Nil 15.7 These contingent liabilities are not expected to crystallise.
(ii)	The Group and its joint venture, Virgin Rail Group Holdings Limited, have in the normal course of business, entered into a number of long term supply contracts. The most significant of these relate to track, station and depot access facilities, together with new train lease and maintenance arrangements.
(iii)	Under UK Rail franchise agreements, the Group and its joint venture, Virgin Rail Group Holdings Limited, have agreed with the UK's Department for Transport annual amounts receivable or payable in respect of the operation of rail franchises for future periods. Under these agreements, there is a requirement to comply with a number of obligations. Failure to comply with these obligations would be a breach of the relevant franchise.
(iv)	The Group and the Company are from time to time party to legal actions arising in the ordinary course of business. Liabilities have been recognised in the financial statements for the best estimate of the expenditure required to settle obligations arising under such legal actions. As at 30 April 2008, the accruals in the consolidated financial statements for such claims total £9.8m (2007: £2.6m).
(v)	The Group provides details of guarantees and other financial commitments in its Annual Report.

  

16	CAPITAL COMMITMENTS

Capital commitments are as follows:

	Audited	Audited
	As at 30 April  2008 £m	As at  30 April  2007 £m
Contracted for but not provided:  For delivery in one year	95.8	74.3

17	RELATED PARTY TRANSACTIONS

Details of major related party transactions during the year ended 30 April 2008 are provided below, except for those relating to the remuneration of the Directors and management.

(i)	Virgin Rail Group Holdings Limited - Non-Executive Directors
	Two of the Group's managers are non-executive directors of Virgin Rail Group Holdings Limited. During the year ended 30 April 2008, the Group earned fees of £45,415 (2007: £25,000) from Virgin Rail Group Holdings Limited in this regard.
(ii)	Noble Grossart Limited
	Ewan Brown (Non-Executive Director) is a former executive director and current non-executive director of Noble Grossart Limited that provided advisory services to the Group during the year. Total fees payable to Noble Grossart Limited in respect of the year ended 30 April 2008 amounted to £20,000 (2007: £20,000). At 30 April 2008, Noble Grossart Investments Limited, a subsidiary of Noble Grossart Limited, held 4,084,999 (2007: 6,354,443) ordinary shares in the Company, representing 0.6% (2007: 0.6%) of the Company's issued ordinary share capital.
(iii)	Alexander Dennis Limited
	Brian Souter (Chief Executive) and Ann Gloag (Non-Executive Director) collectively hold 37.9% (2007: 37.2%) of the shares and voting rights. Noble Grossart Investments Limited (see (ii) above) controls a further 28.4% (2007: 27.9%) of the shares and voting rights of Alexander Dennis Limited. None of Brian Souter, Ann Gloag or Ewan Brown is a director of Alexander Dennis Limited nor do they have any involvement in the management of Alexander Dennis Limited. Furthermore, they do not participate in deciding on and negotiating the terms and conditions of transactions between the Group and Alexander Dennis Limited. For the year ended 30 April 2008, the Group purchased £34.8m (2007: £42.8m) of vehicles from Alexander Dennis Limited and £3.2m (2007: £3.9m) of spare parts and other services.  For new orders placed with Alexander Dennis Limited for vehicles, the Group has consulted with the UK Listing Authority and taken the appropriate measures to ensure that the transactions with Alexander Dennis Limited comply with the Listing Rules.
(iv)	Pension Schemes
	Details of contributions made to pension schemes are contained in note 14.

  

17	RELATED PARTY TRANSACTIONS (CONTINUED)

(v)	Robert Walters plc
	Martin Griffiths became a non-executive director of Robert Walters plc in July 2006 and received remuneration of £39,167 (2007: £29,000 from 12 July 2006 to 30 April 2007) in respect of his services for the year ended 30 April 2008. Martin Griffiths holds 12,000 shares in Robert Walters plc, which represents 0.01% of the issued share capital.
(vi)	Glasgow Income Trust plc
	Martin Griffiths became a non-executive director of Glasgow Income Trust plc on 8 November 2007 and received £6,689 in respect of his services for the period ended 30 April 2008.
(vii)	Loan to New York Splash Tours LLC
	An interest bearing long-term loan of £1.8m (2007: £1.9m) was outstanding from New York Splash Tours LLC as at 30 April 2008.

18	POST BALANCE SHEET EVENTS

On 16 May 2008, the Group completed the acquisition of Highland Country Buses Ltd and Orkney Coaches Ltd from Rapsons Coaches Ltd. The businesses acquired, which operate bus and coach services in the Highlands, Skye and Orkney, have annual revenue of approximately £12.5m, employ around 400 people and run a fleet of around 200 vehicles.

On 31 May 2008, holders of 2,904,318 redeemable 'B' preference shares elected to have these shares redeemed leaving 9,879,359 redeemable 'B' preference shares in issue.

19	STATUTORY FINANCIAL STATEMENTS

The financial information set out in the preliminary announcement does not constitute the Group's statutory financial statements for the year ended 30 April 2008 within the meaning of Section 240 of the Companies Act 1985 and has been extracted from the full financial statements for the years ended 30 April 2008 and 30 April 2007 respectively.

Statutory financial statements for the year ended 30 April 2007, which received an unqualified audit report, have been delivered to the Registrar of Companies.

The report of the auditors on the financial statements for the year ended 30 April 2007 is unqualified and does not contain a statement under either section 237(2) or section 237(3) of the Companies Act 1985. The financial statements for the year ended 30 April 2008 will be delivered to the Registrar of Companies and forwarded to all shareholders in due course. These financial statements will also be available on the Group's website and from the registered office of the Company at 10 Dunkeld Road, Perth PH1 5TW.

The Board of Directors approved this announcement on 25 June 2008.

 

20	DEFINITIONS

The following definitions are used in this document:

• Like-for-like amounts are derived, on a constant currency basis, by comparing the relevant year-to-date amount with the equivalent prior year period for those businesses and individual operating units that have been part of the Group throughout both periods.

  

20	DEFINITIONS (CONTINUED)

• Operating profit for a particular business unit or division within the Group refers to profit before net finance income/charges, taxation, intangible asset expenses, exceptional items and restructuring costs.

• Operating margin for a particular business unit or division within the Group means operating profit as a percentage of revenue.

• Exceptional items means items which individually or, if of a similar type, in aggregate need to be disclosed by virtue of their nature, size or incidence in order to allow a proper understanding of the underlying financial performance of the Group.

• Net debt (or net funds) is the net of cash and borrowings as reported on the consolidated balance sheet, adjusted to exclude any accrued interest and deferred gains on derivatives.

ENDFR SEMFILSASEIM

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Related Shares:

SGC.L