29th Oct 2008 07:00
Trading update
Stagecoach Group plc ("the Group") is today providing an update on trading in advance of a series of meetings with analysts.
The Group plans to announce its interim results for the six months ending 31 October 2008 on 3 December 2008.
Overall financial performance
The Group provided an update on trading as part of an Interim Management Statement published on 28 August 2008. Since then, the overall trading performance of the Group has been in line with management's expectations.
Divisional financial performance
Like-for-like revenue growth* in each of the Group's main businesses is provided below.
UK Bus - twenty four weeks ended 12 October 2008 9.2%
UK Rail - twenty four weeks ended 12 October 2008 8.3%
North America - five months ended 30 September 2008 8.4%
(including megabus.com)
Virgin Rail Group - twenty four weeks ended 12 October 2008
The UK Bus Division continues to trade strongly with like-for-like growth in both revenue and passenger volumes. Total revenue, including the impact of acquisitions and disposals, was up 11.7%.
The UK Rail Division continues to deliver like-for-like growth in both revenue and passenger volumes. The reported growth of 8.3% includes the negative effect of the transfer of Reading-Brighton train services from South Western Trains to another operator, which has reduced the reported growth rate by around 1.0%. The UK Rail Division's profit for the year ending 30 April 2009 will include the costs of the Group's bid for the South Central franchise.
The reported like-for-like revenue growth for UK Rail does not include East Midlands Trains. For the twenty four weeks ended 12 October 2008, the revenue of East Midlands Trains when compared to the equivalent businesses under their former ownership was 14.2% higher than the previous year.
The North American business continues to benefit from favourable conditions for bus and coach travel and we are pleased with the development of Megabus North America.
As previously reported, recent train performance and reported revenue at Virgin Rail Group have been adversely affected by work being undertaken on the railway infrastructure by Network Rail in anticipation of the increase in train services from December 2008. However, because Virgin Rail Group is compensated for this disruption, its overall profitability has not been adversely affected.
Outlook
Although the uncertain economic environment reduces medium term visibility of financial performance, the Group's portfolio of businesses should be relatively resilient to the effects of declining economic growth. The Group will continue to critically review the cost base of its rail businesses and will implement cost savings if and when appropriate.
As consumers experience increased costs in general and higher motoring costs in particular, the Group's good-value bus, train and tram services continue to attract passengers from other modes of transport. In particular, value products such as Megabus in North America and advance-purchase rail tickets in the UK are gaining in popularity. This combined with increasing environmental awareness, the Group's strong operational performance and new and innovative products continues to drive revenue growth. Accordingly, whilst we continue to closely monitor economic developments, the outlook for the Group remains positive.
* Like-for-like revenue growth is derived, on a constant currency basis, by comparing year-to-date revenue with the equivalent prior year period for those businesses and individual operating units that have been part of the Group throughout both periods. In the case of Virgin Rail Group, the like-for-like revenue growth relates to West Coast Trains only and in order to obtain a like-for-like comparison, it excludes the services that were transferred from CrossCountry Trains to West Coast Trains.
For further information, please contact:
Stagecoach Group plc www.stagecoachgroup.com
Martin Griffiths, Finance Director 01738 442111
Steven Stewart, Director of Corporate Communications 07764 774680
Smithfield Consultants
John Kiely 0207 3604900
Notes
Stagecoach Group
Stagecoach Group is a leading international public transport group, with extensive bus and rail operations in the UK and North America.
Cautionary Statement
This announcement contains certain forward-looking statements with respect to the financial performance, financial position and businesses of Stagecoach Group plc. These statements and forecasts involve risk, uncertainty and assumptions because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. These forward-looking statements are made only as at the date of this announcement. Except as required by law, Stagecoach Group plc has no obligation to update the forward-looking statements or to correct any inaccuracies therein.
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