New East Midlands Trains Franchise

16 September 2015

STAGECOACH GROUP AGREES NEW EAST MIDLANDS TRAINS FRANCHISE

Stagecoach Group plc ("Stagecoach") is pleased to confirm that its subsidiary, East Midlands Trains Limited ("East Midlands Trains"), has agreed a new franchise with the Department for Transport ("DfT").

Passengers will benefit from an overall investment of around £13m under the new agreement, of which £8m is directly funded by East Midlands Trains, and will see improvements to stations, new technology and better on-board services.

Local communities will gain from the new deal, which will see an extra £250,000 invested in community rail, the introduction of a new schools education programme and continued investment in apprenticeships and graduate schemes.

Taxpayers will benefit from the agreement, with £150m of forecast premium payments to the Government between October 2015 and March 2018.

The new franchise will commence on 18 October 2015 and run until 4 March 2018. The DfT has the option to extend the contract by up to one year on commercial terms that have already been agreed.

Highlights for customers will include:

Better value fares - freeze on all Anytime fares to London until 2017; and quarter of a million discounted Advance Purchase tickets made available through our biggest ever ticket sale

New technology and easier travel - launch of new mobile app; upgraded 4G connectivity on trains and free 15 minutes WiFi on London trains in Standard Class; new smartphones for customer-facing employees; more ticket machines; and extra help-points at stations 

Faster refunds - an improved online compensation system for delays, providing faster compensation to customers who make valid claims;

Cleaner stations and trains - extra cleaning staff on trains and cleaner stations

Accessibility and security improvements - new in-house disability expert; improved passenger assistance system; £1m investment in station accessibility improvements; and extension of secure stations programme

Improved on-board service - on-board shop available on many busy peak time services to/from London to offer an even wider range of drinks and snacks; catering trolley service extended to more stops on Liverpool to Norwich services; complimentary First Class breakfast extended to include selected Saturday morning services for the first time

More seats and faster journeys - further improvements to the Nottingham-Newark-Lincoln timetable, with extra services and faster journey times on Saturdays; working with the Department for Transport to examine options for further improvements to services at weekends across other local routes

Community engagement - extension of community rail programme, supported by extra £250,000 in funding and new Partnerships Manager; roll out of schools education and work experience initiatives; new Charity Committee; expansion of popular station adoption scheme; and further work to promote and support local small and medium-sized businesses

 Investment in people - more frontline staff to help customers; enhanced customer service training for employees; providing more opportunities for graduates and young people.

Under the terms of the new franchise, Stagecoach will provide committed inter-company loan facilities of up to £41m to East Midlands Trains, and arrange a performance bond of £15m. It will also arrange a season ticket bond of around £8m. These will replace all loan facilities and bonds currently in place in relation to the present East Midlands Trains franchise.

The award of the new franchise does not materially affect Stagecoach's expectation of overall group profitability.

Martin Griffiths, Stagecoach Group Chief Executive, said: "This is a significant package of investment for customers travelling on East Midlands Trains, Britain's most punctual long-distance train operator. It will build on what our team has achieved over the past eight years and deliver further valuable improvements for the millions of passengers and many communities who rely on the East Midlands Trains network.

"Britain's railway is part of the fabric of our communities - that is why our plans include more opportunities for graduates and young people, new links with schools, greater investment in community rail, and improved training to help our employees deliver a first class service to customers.

"The new East Midlands Trains franchise will also deliver a multi-million-pound return to the taxpayer to help fund the Government's ongoing investment programme for the UK rail network."

ENDS

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