Trading update

29 October 2013

Stagecoach Group plc

Trading update

Stagecoach Group plc ("the Group") is today providing an update on trading in advance of a series of meetings with analysts.

Financial performance

The overall profitability of the Group has remained satisfactory, and there has been no significant change to our expected adjusted earnings per share for the year ending 30 April 2014.

Like-for-like revenue growth for the financial year to date in each of the Group's main businesses is provided below.

UK Bus (regional operations) - twenty four weeks ended 13 October 2013 5.0%

UK Bus (London) - twenty four weeks ended 13 October 2013 (1.6)%

UK Rail - twenty four weeks ended 13 October 2013 3.0%

North America - five months ended 30 September 2013 7.3%

(including Megabus.com)

Virgin Rail Group - twenty four weeks ended 13 October 2013 6.1%

UK Bus (regional operations)

Our UK Bus (regional operations) division has performed strongly during the period, with both passenger volumes and revenue growing year-on-year. Strongest growth continues to be achieved in our commercial revenue, with concessionary, tendered and school revenue growing at a lower rate. Revenue growth in the twelve weeks ended 13 October 2013 was higher than the previously reported revenue growth of 4.5% for the preceding twelve weeks mainly as a result of revenue earned from providing additional bus services to replace train services that were affected by planned railway resignalling work in the Nottingham area.

UK Bus (London)

Our UK Bus (London) division has continued to perform well, as we remain focused on keeping tight control of costs to ensure we can compete effectively for contracts. The reduction in revenue during the period includes the effect of non-recurring revenue related to the London Olympic and Paralympic Games, and is in line with our expectations. It is anticipated to reverse in the second half of the financial year as we benefit from the nine new contracts won last financial year. From 1 October 2013, the business no longer receives Bus Service Operators' Grant (a rebate of fuel duty) but this will be offset by a corresponding uplift in the contract prices paid to the business by Transport for London. The impact of this change will be an increase in both our reported revenues and costs, and a decline in profit margin but no overall change to profit.

UK Rail

The financial performance of our rail businesses is in line with our expectations. As expected, the rate of revenue growth is lower than that reported for the first twelve weeks of the financial year, which is partly due to the effects of (a) non-recurring revenue in 2012 related to the London Olympic and Paralympic Games and (b) current year resignalling work in the Nottingham area.

We continue to discuss with the Department for Transport (DfT) the planned extensions to our South Western Trains and East Midlands Trains franchises.

We submitted our bid for the Docklands Light Railway franchise to Transport for London in September 2013 and we are now one of three bidders. We also continue to progress our bid for the Thameslink franchise. The announcements of the winning bidders for those franchises are expected in Spring 2014.

We look forward to shortly receiving the pre qualification material for the new East Coast franchise and will evaluate this opportunity in conjunction with Virgin, our joint venture partner on the current West Coast franchise.

North America

Megabus.com in North America is the fastest-growing part of the Group, increasing revenue by 23.7% in the five months ended 30 September 2013. This reflects further growth in existing services, as well as contributions from our Texas and California networks launched during 2012/13. Overall, the North American business remains on track to deliver a significant increase in its operating profit in 2013/14 when compared to 2012/13. We are continuing to expand our megabus.com business, and intend to add significant new operating mileage over the next 12 months.

Virgin Rail Group

Virgin Rail Group (VRG) continues to earn a fee equivalent to 1% of revenue from the West Coast rail franchise with the DfT taking the risk that revenue and/or costs differ from those expected. VRG and the DfT are discussing revised commercial terms that could see VRG take greater revenue and cost risk for the period from a date to be agreed through to April 2017 for a commensurate financial return.

Twin America

Sightseeing revenue at our Twin America joint venture has reduced year-on-year in an increasingly competitive New York sightseeing market, that has seen Twin America's share of the hop-on, hop-off sightseeing bus tour market reduce.

We continue to engage with the Department of Justice to seek a resolution to the current litigation involving Twin America.

Financial position

The Group maintains a strong financial position with investment grade credit ratings and appropriate headroom under its debt facilities. Consolidated net debt has, as expected, remained broadly consistent with the position at 30 April 2013 reflecting continued strong cash generation, offset by the reversal of favourable working capital timing differences in the previous financial year.

Outlook

Overall current trading is good and the prospects for the Group remain positive.

Interim results

The Group plans to announce its interim results for the six months ended 31 October 2013 on 11 December 2013.

For further information, please contact:

Stagecoach Group plc www.stagecoachgroup.com

Investors and analysts

Ross Paterson, Finance Director 01738 442111

Bruce Dingwall, Group Financial Controller 01738 442111

Media

Steven Stewart, Director of Corporate Communications 07764 774680

Notes

(1) 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.

(2) 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.