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RNS Number:0707T
Stagecoach Group PLC
10 December 2003
10 December 2003
Stagecoach Group plc - Interim results for the six months ended 31 October 2003
Highlights
* Strong half-year with UK Bus, Rail, Coach USA and New Zealand
operating profits all up on the same period last year
* Substantial growth in London bus business with revenue up 19.8%
* Passenger numbers at UK Bus up 1.3% outside London
* Innovative growth ideas introduced in UK bus operations
* New South West Trains and Island Line franchises agreed
* South West Trains passenger volumes up 3.1%
* Coach USA restructuring largely completed
* Continued revenue and passenger growth in New Zealand
* Disposal of Citybus
Financial Highlights
* Turnover #963.8m (2002 - #1,067.7m)
* Total operating profit* #76.9m (2002 - #86.9m)
- #75.9m (2002 - #74.3m), excluding disposed Citybus business
* Profit before tax #44.8m (2002 - loss of #524.1m)
* Profit before tax* #60.3m (2002 - #75.2m**)
* Earnings per share* 3.2p, down from 4.4p
* Free cash flow #100.3m (2002 - #100.2m)
* Net debt down 62.3% from #560.0m to #210.9m
* Interim dividend up 12.5% to 0.9p (2002 - 0.8p)
* excluding goodwill amortisation and exceptional items
** prior year included #15.0m of non-recurring gains on repurchase of bonds
and #7.2m non-recurring liquidated damages at South West Trains
Commenting on the results, Stagecoach Chief Executive, Brian Souter said: "These
are a strong set of results and reflect the further significant progress we have
made across the Group in the past six months in delivering on our strategy.
"Our growth prospects are good and our innovative approach to attracting
passengers to public transport is beginning to deliver good results.
"The restructuring of our Coach USA operations is nearing completion and we are
very focused on delivering value from the strong businesses we have retained in
the North East and North Central regions of the United States, and in Canada.
"We now have a strong portfolio of cash-generative businesses and good potential
for further growth."
Enquiries to: Martin Griffiths, Stagecoach Group - 01738 442111
Steven Stewart, Stagecoach Group - 01738 442111 or 07764 774680
John Kiely, Smithfield Financial - 020 7360 4900
Note to Editors:
High resolution photographs are available to the media free of charge at
www.newscast.co.uk (telephone +44 (0) 207 608 1000).
Chairman's statement
Stagecoach Group has enjoyed a strong trading performance in the first six
months of the year. Operating profit at each of UK Bus, Rail, Coach USA and New
Zealand is up on the same period last year and we are encouraged by the
particularly strong growth in our UK bus and rail businesses. Across the Group,
we have a strong portfolio of profitable and cash generative businesses.
We have continued to reduce our net debt from a combination of cash flows
generated by our operations and business disposals. This will bring long-term
benefits to the business. Net debt reduced by 62.3% in the six months ended 31
October 2003, down from #560.0m to #210.9m.
Total turnover for the six months was #963.8m (2002 - #1,067.7m). Total
operating profit (before goodwill amortisation and exceptional items) was #76.9m
(2002 - #86.9m). The fall in operating profits largely reflects the disposal of
Citybus. Excluding Citybus, operating profit on an equivalent basis was up from
#74.3m to #75.9m.
The Directors have declared an interim dividend of 0.9p per share (2002 - 0.8p)
and this reflects the Board's confidence in the prospects for the Group. The
interim dividend is payable to shareholders on the register at 13 February 2004
and will be paid on 10 March 2004. Based on continued strong and stable cash
flows and profits within the business, we will look to progressively grow the
dividend.
Stagecoach is leading the way in the UK bus industry with new ideas and new
products. We have launched two UK firsts in the past six months - Megabus.com,
the country's first Internet-only inter-city bus service, and Yellow Taxibus, an
innovative demand responsive service that combines the benefits of a fixed bus
route with the flexibility of a taxi. Our UK Bus operations have achieved strong
revenue growth, and will be boosted by investment in new buses during this
financial year.
Stagecoach New Zealand has also delivered further passenger and revenue growth
over the past six months, continuing a consistent trend over more than a decade.
Revenues and passenger volumes have grown strongly in our UK Rail operations,
and we continue to seek to improve our service to customers. South West Trains
has achieved a significant reduction in delay minutes under its control, and the
first of our new Desiro trains, part of a #1billion investment in new rolling
stock, has now entered service.
At Virgin Rail Group, management is continuing to progress negotiations with the
Strategic Rail Authority ("SRA") regarding the longer-term commercial
arrangements for the CrossCountry and West Coast franchises.
This time last year, we had just completed a business review of our North
American operations. One year on, we are now in the final phase of our Coach USA
restructuring programme. We have made a number of targeted disposals in recent
months and have demonstrated an ability to deliver our strategy as planned. I
believe that our businesses in the North East, North Central, and Canada provide
a strong platform for future growth.
We have made an encouraging start to the second half of the year and I am
pleased to report that the current trading of the Group remains in line with the
expectations set out in the Company Statement of 21 October 2003. I believe that
the Group's portfolio of businesses offers good prospects for further growth and
increased shareholder value.
Robert Speirs
Chairman 10 December 2003
Chief Executive's operating review
Overview
We have made significant progress across the Group in the past six months and
are well positioned to deliver enhanced value from our core businesses.
Our growth prospects are good and our innovative approach to attracting
passengers to public transport is beginning to deliver good results.
Our restructuring at Coach USA is nearing completion and we are focusing on
delivering value from the strong businesses we have retained in the North East
and North Central regions of the United States, and in Canada.
UK Bus
Turnover from our UK Bus operations was up 8.2% to #317.9m, compared to #293.8m
in the prior year. Operating profits* were #34.3m (2002 - #31.1m). Operating
margins were 10.8%, compared to 10.6% in 2002. The reported profits include the
effects of an increasing use of operating leases to fund new vehicles. Excluding
the impact of this change in financing, operating margins increased from 10.7%
to 11.3%. This is a very encouraging performance and the reported profits have
been achieved after taking account of increased National Insurance and pension
costs.
* (Operating profit of a particular business unit referred to in the
Chief Executive's operating review is operating profit before restructuring
costs, goodwill amortisation and exceptional items. Operating margins are
referred to on an equivalent basis).
UK Bus has also seen passenger growth in the first half of the year. Growth is
continuing in our strong provincial bus networks across the UK and passenger
volumes outside London have increased by approximately 1.3%. We are greatly
encouraged by this volume growth which has been achieved even after taking
account of nine days of industrial action in our Devon operations.
We have achieved further success in London, where we operate buses on behalf of
Transport for London. We have introduced new vehicles and revenue is up 19.8%
compared to the same period last year. This growth is partly a result of the
introduction of congestion charging in February 2003.
We are leading the way with a range of new products that we believe have
significant potential to attract new users to public transport.
Megabus.com, the UK's first Internet-only bus operation, has only been in
operation for four months, and we are encouraged by the growth we have seen on
existing routes. We have adapted the revenue yield management techniques of
other industries to buses and we are now considering extending the product to
other locations.
We are also using the Internet with success to target the significant student
market in key locations around the country, including Aberdeen, Glasgow,
Manchester and Newcastle. A new improved e-commerce site has been developed to
encourage students to take up our Unirider term and year tickets, which promote
increased customer loyalty.
Our "phone and go" Yellow Taxibus operation in Fife, Scotland, which was
launched in the summer, is the first commercially run service of its kind in the
country. It is an innovative idea that combines the benefits of a fixed bus
route with the flexibility of a taxi, allowing pre-booked pick-ups. We believe
it offers a new public transport alternative for commuters who travel on the
heavily congested route from Fife into Edinburgh.
Both the Department for Transport and the Scottish Executive are taking forward
our "Kick Start" proposal for targeted funding to support the introduction of
new services and reinvigorate the UK Bus network. We are also planning
additional schemes of our own following the success of a pilot project in Perth,
Scotland, over the past three years.
We are seeking to improve the environmental and operational performance of our
bus fleet. Stagecoach has signed an agreement with Cerulean International Ltd,
the Oxford-based subsidiary of the nanomaterials company Oxonica Ltd, to trial a
fuel additive product in up to 1,000 buses across the country. Initial trials of
the product in Hong Kong delivered a significant cut in engine carbon deposits
and lower vehicle emissions and a 10% fuel consumption reduction. We believe
this new product has huge potential for the whole UK bus industry and, if the
commercial evaluation is successful, we plan to adopt the technology across our
7,000-vehicle UK Bus fleet.
Rail
We operate two wholly owned UK heavy rail franchises - South West Trains and
Island Line - and Sheffield Supertram.
Turnover from our UK Rail subsidiaries for the six months to 31 October 2003 was
#216.7m (2002 - #206.0m). Overall passenger volumes at South West Trains
increased by 3.1% over the equivalent six-month period last year. Operating
profit was #21.5m (2002 - #18.9m), with an operating margin of 9.9% (2002 -
9.2%). The prior year figure of #18.9m included non-recurring liquidated damages
of #7.2m.
The first of our new state-of-the-art Desiro Class 450 trains, manufactured by
Siemens, went into service in October, providing passengers with an improved
travelling environment. Proposals have been agreed with the SRA for extensive
refurbishment of our inner suburban train fleet to provide better passenger
comfort and improved reliability.
Our investment in TravelSafe officers has made a significant impact on customer
confidence with a 10% reduction in crime. The ground-breaking security and
anti-crime initiative was one of several South West Trains successes at the
National Rail Awards. In May, we introduced a new station at Chandlers Ford in
Hampshire, the first station to be opened on the South West Trains network since
privatisation and the fruit of an innovative partnership with Hampshire County
Council, the SRA and Network Rail.
At South West Trains, we have concentrated closely on driving up operational
performance and during 2003 the business has delivered significant improvement
in delay minutes under its control. A major project is well underway to bring
together South West Trains and Network Rail in one integrated control centre.
The initiative aims to improve performance and the ability to recover more
quickly from operational incidents.
Stagecoach has taken a lead role as the representative for the rail industry in
helping Network Rail improve train service delivery. Graham Eccles, our
Executive Director - Rail, has been appointed as a part-time advisor to Network
Rail and will help the infrastructure operator develop its operational structure
and procedures following its decision to take all maintenance in-house. This
appointment is recognition of Graham's vast experience in the industry and the
need for close working between Network Rail and train operators to improve
punctuality.
South West Trains is operating under a one-year extension to the existing
franchise and the new three-year franchise will come into effect on 1 February
2004. A similar three-year franchise to run to February 2007 has been finalised
for Island Line, which brings stability to the local transport service for the
eastern side of the Isle of Wight.
We continue to evaluate targeted opportunities in the rail market and we have
expressed interest in the new Integrated Kent Franchise. The franchise is
expected to include routes on the national rail network throughout Kent, parts
of Sussex and South East London, as well as domestic services on the Channel
Tunnel Rail Link. The SRA has indicated that an operator is expected to run the
franchise from early 2005 and we believe it would be an excellent fit with our
successful South West Trains high-volume commuter network.
Virgin Rail Group
Our joint venture with Virgin Management Group, Virgin Rail Group, in which
Stagecoach has a 49% share, operates the West Coast and CrossCountry franchises.
Our share of Virgin Rail Group's turnover for the period amounted to #149.5m
(2002 - #140.6m) and our share of operating profits was #5.0m (2002 - #7.7m).
Negotiations with the SRA regarding the arrangements for the West Coast and
CrossCountry franchises from March 2004 are progressing well. Both franchises
are currently operating on a budget determined by the SRA in accordance with the
agreement reached between Virgin Rail Group and the SRA in July 2002.
The introduction of new Voyager trains on the CrossCountry franchise has been
completed with year on year passenger growth of 22.6% experienced in the six
months to 31 October 2003, while new Pendolino trains will be operating 40% of
West Coast services from 15 December 2003.
Coach USA
Trading at Coach USA is in line with our expectations. Turnover for the six
months to 31 October 2003 was #234.0m (2002 - #334.2m). The fall in revenue
largely reflects business disposals in the period. Overall, like for like
revenues are 3.1% below prior year levels, reflecting a continued weakness in
the leisure-related markets. We have, of course, reduced our ongoing exposure to
these markets through our restructuring of Coach USA.
Operating profit for the six months was #15.9m (2002 - #15.8m), giving an
operating margin of 6.8%, up from 4.7%.
We have made excellent progress with the restructuring of Coach USA over the
past six months and we are now in the final phase of the programme. Since 30
April 2003, we have completed the sale of our New England, Transit, West, South
Central and South East regions, as well as the disposal of a number of our taxi
businesses, including the substantial Texas taxi operations.
Negotiations for the sale of our remaining taxi businesses are at an advanced
stage. Consistent with our strategy, the Group is reducing overheads in line
with the business restructuring and sales programme. This includes the phased
closure of the Coach USA corporate office in Houston.
We are focusing our investment and service development in the North East
(covering the states of New York and New Jersey) and North Central (covering the
states of Illinois, Wisconsin and Pennsylvania) regions, and Canada.
These residual businesses are far more robust, with approximately 60% of the
revenue base being traditional bus services and contract work, which is more
predictable. We have, however, retained some charter, tour and sightseeing
businesses, which have good potential to grow as the US economy recovers and the
leisure market expands.
In the North East, we are benefiting from the development of Jersey City, which
is thriving as major corporations open offices in the area. Commuter travel to
and from New York City by express coach remains strong. We continue to look for
opportunities for targeted bolt-on acquisitions.
Our popular New York sightseeing product, which has performed extremely well
over the last two years, continues to have a leading market share and has
experienced further passenger growth as new routes and vehicles are added. We
have a similar sightseeing operation in Chicago and the introduction of new
double decker vehicles has seen further revenue growth.
Within our North Central region, we have a significant and growing school bus
business in Wisconsin, which now accounts for around 8% of the revenue base of
our retained operations in North America. This is an excellent, predictable
business, which provides strong cashflow over the winter months, and we are very
focused on winning new contracts.
Overseas Bus
(i)New Zealand
Stagecoach New Zealand, which operates around 1,000 buses in Auckland and
Wellington, the country's largest metropolitan areas, continues to perform
strongly.
Turnover from our New Zealand businesses has increased from #21.5m to #26.4m,
while operating profits are up from #4.4m to #4.9m. This represents an operating
margin of 18.6% (2002 - 20.5%). The strong performance reflects the organic
growth achieved together with the ongoing focus on cost control.
The Flyer premium express service has recently been extended and now links
Wellington International Airport, Wellington Central Business District, Lower
Hutt City, and Upper Hutt City, using distinctively branded buses with upgraded
seating and specially chosen drivers. Year on year patronage on this service has
grown by 15% and revenue is up 20% since the route was extended, with the
service now approaching capacity at peak times.
Stagecoach New Zealand has played a leading role in setting up integrated
ticketing companies in both Auckland and Wellington. Owned by consortia of local
operators, these companies provide clearing house services and marketing for a
range of multi-modal and multi-operator passes, which are currently being rolled
out in Auckland and Wellington.
(ii)Citybus
Citybus, which was disposed of in June 2003, contributed #17.8m (2002 - #70.3m)
to turnover in the six-month period and #1.0m (2002 - #12.6m) to operating
profit.
thetrainline
thetrainline, our joint venture with Virgin, is the market leader in direct rail
retailing in the UK, and offers considerable scope for future growth through
Internet and telephone based sales.
Our share of thetrainline's operating losses was #1.7m (2002 - #1.4m). We are
currently working on opportunities to maximise value from our investment in
thetrainline.
Road King Infrastructure
Our investment in Road King Infrastructure continues to generate acceptable
returns and cash dividends. Our share of operating profits for the half-year was
#5.0m (2002 - #5.8m), reflecting Road King's results for the six months ended 30
June 2003. Traffic and toll revenue growth for the six months were 1.9% and
10.3% respectively, excluding the impact of the disposal of Road King's interest
in two projects. Our investment in Road King Infrastructure remains a non-core
part of our portfolio.
Group Strategy and Outlook
Stagecoach Group is a leading international transport operator with interests in
the UK, North America and New Zealand. We will continue to seek to maximise
shareholder returns from our existing operations.
Our challenge is to achieve organic growth from our core UK bus business by
developing new products and reinvigorating existing networks.
With a significant share of the UK rail market, we will also look to maximise
value from our existing rail franchises, whilst pursuing new opportunities in
the commuter rail, inter-city rail and light rail arenas.
Our completion of the restructuring programme at Coach USA will result in a
smaller, but still significant North American business. It will have over
US$300m of revenue per annum and, importantly, a more predictable income stream.
We believe the US$22m operating profit achieved in the year ended 30 April 2003
can be sustained and grown despite the lower revenue base. In addition, we will
explore organic growth opportunities and the potential for small bolt on
acquisitions.
Stagecoach New Zealand is a core part of the Group and we believe there are
continued growth characteristics in that business.
I am confident in the prospects for the Group, which has a strong portfolio of
cash-generative businesses and good potential for further growth.
Brian Souter
Chief Executive 10 December 2003
Finance Director's review
Overall Review
We have seen a strong trading performance in the six months ended 31 October
2003 with operating profit growth in each of our four key continuing divisions.
In the period, net debt reduced by #349.1m to #210.9m. The results are a
confirmation of the Group's strategy, and reflect our increased financial
strength.
Turnover for the six months ended 31 October 2003 was #963.8m (2002 -
#1,067.7m). Total operating profit (before goodwill amortisation and exceptional
items) was #76.9m compared to #86.9m in the prior year. The decrease in
operating profit reflects the impact of the Citybus disposal which was completed
in June 2003. Excluding the effect of this disposal, operating profit (before
goodwill amortisation and exceptional items) increased from #74.3m to #75.9m for
the six months.
The divisional results are summarised below:
Six months ended 31 October 2003 Six months ended 31 October 2002
Turnover Operating Operating Turnover Operating Operating
#m Profit Margin #m Profit Margin
#m % #m %
UK Bus 317.9 34.3 10.8% 293.8 31.1 10.6%
Coach USA 234.0 15.9 6.8% 334.2 15.8 4.7%
Overseas Bus
- New Zealand 26.4 4.9 18.6% 21.5 4.4 20.5%
- Discontinued 17.8 1.0 5.6% 70.8 12.6 17.8%
Rail 216.7 21.5 9.9% 206.0 18.9 9.2%
Virgin Rail 149.5 5.0 3.3% 140.6 7.7 5.5%
Road King - 5.0 - 5.8
Group - (4.2) - (4.5)
overheads
Other* 1.5 (6.5) 0.8 (4.9)
------- -------- -------- --------
963.8 76.9 1,067.7 86.9
Exceptionals - - - (575.0)
Goodwill - (9.6) - (24.3)
------- -------- -------- --------
963.8 67.3 1,067.7 (512.4)
------- -------- -------- --------
* includes restructuring costs and strategic investments including thetrainline
Earnings before interest, taxation, depreciation, goodwill amortisation and
exceptional items (pre-exceptional EBITDA) amounted to #111.4m (2002 - #138.5m).
Depreciation for the period decreased from #51.6m to #34.5m. Goodwill
amortisation fell from #24.3m to #9.6m. These decreases in goodwill amortisation
and depreciation reflect the disposals completed in the six months ended 31
October 2003 and the Coach USA impairment losses recognised in the year ended 30
April 2003.
Net exceptional charges before tax of #5.9m (2002 - #575.0m) were reported. The
exceptional charges comprise a loss on the sale of our Citybus operations and
Chongqing investment of #0.8m and a loss on sale of #5.1m on the disposals at
Coach USA.
Non-exceptional restructuring costs included within operating profit amounted to
#4.1m (2002 - #2.9m), of which #3.5m (2002 - #0.9m) relates to the restructuring
at Coach USA and #0.6m (2002 - #2.0m) relates to redundancy costs incurred in
our other divisions.
Overall, earnings per share before goodwill amortisation and exceptional items
decreased to 3.2p, compared to 4.4p in the prior year reflecting the disposals
completed in the six months. Prior year earnings per share benefited from
non-recurring gains on the repurchase of bonds and non-recurring liquidated
damages at South West Trains, which before tax together amounted to #22.2m
(#15.5m after tax).
Acquisitions and Disposals
In June 2003, we announced the disposal of Citybus. The consideration amounted
to HK$2,200m. The net cash received was HK$1,646m, which represented the gross
consideration less the amount of net third party debt as at 30 April 2003.
Further details on the disposal were given in the Group's announcement on 9 June
2003. The sale of our Citybus operations realised a gain on sale of #0.3m and we
recorded a loss on sale of #1.1m on our investments in associated companies
operating in the Chinese city of Chongqing.
As part of the Group's restructuring of Coach USA, we completed the disposal of
certain of our US divisions in the six months. The net loss on these disposals
amounted to #5.1m.
The overall effect of the disposals in the six months ended 31 October 2003 was
to reduce net debt by #305.7m.
Net debt increased by #6.5m in the six months from cash spent on acquisitions,
comprising small acquisitions in the period and payment of deferred
consideration in respect of acquisitions made in previous years.
Shares in Issue
The weighted average number of shares for the six months ended 31 October 2003
was 1,318.1m. The number of shares ranking for dividend at 31 October 2003 was
1,323.1m.
Operating Cash Flows and Capital Expenditure
The strong cash generative nature of the Group is once again highlighted by free
cash flow for the six months of #100.3m (2002 - #100.2m). This, combined with
the significant cash generated from disposals of businesses in both America and
Hong Kong, saw the Group achieve a recent credit rating upgrade to investment
grade status giving the Group added financial flexibility.
Capital expenditure for the six months was #39.2m (2002 - #33.4m). This
primarily related to expenditure on passenger service vehicles.
Net Assets and Net Debt
Net assets at 31 October 2003 were #336.6m (30 April 2003 - #317.1m).
Net debt decreased from #560.0m at 30 April 2003 to #210.9m at 31 October 2003.
This mainly reflects the cash received in disposal proceeds, the cash generation
of our continuing businesses and a #17.5m reduction in net debt arising from the
re-translation of balances denominated in foreign currencies.
Interest
Net finance charges increased from #11.7m to #16.6m. The ratio of
pre-exceptional EBITDA to net finance charges was 6.7 for the six months ended
31 October 2003 (2002 - 11.8). The finance charges of #11.7m for the comparative
period last year included non-recurring gains of #15.0m on the buyout of our
bonds. The reduction of #10.1m in underlying finance charges is as a result of
our reduced net debt levels.
At 31 October 2003, 53% (30 April 2003 - 41%) of the Group's gross borrowings
were covered by fixed and capped/floored interest rates.
Taxation
Our effective tax rate for the interim period is 33.7% (2002 - 31.4% excluding
exceptional write-offs of #575.0m at Coach USA) and the effective tax rate
before goodwill amortisation and all exceptional items is 29.7% (2002 - 23.8%).
The increased rates reflect the change in the mix of pre-tax profits by division
and the differences in the corporate tax rates applying to each division.
Fuel Hedging
We have hedging arrangements in place to cover all of our expected fuel
consumption until 30 April 2004 at the current time at a hedge price below the
current market level and our hedging position is under constant review.
Accounting Policies
There have been no changes to our accounting policies during the six months
ended 31 October 2003. Our policies have been reviewed against recent accounting
pronouncements and no significant changes are expected in the current financial
year.
Martin A Griffiths 10 December 2003
Finance Director
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Unaudited Audited
6 months to 31 October 2003 6 months to 31 October 2002
Performance Goodwill Results Performance Goodwill Results Year to
pre and for pre and for the 30 April
goodwill exceptional the goodwill exceptional period 2003
and items period and items
exceptionals exceptionals
Notes #m #m #m #m #m #m #m
Turnover:
Group and 4 963.8 Nil 963.8 1,067.7 Nil 1,067.7 2,076.6
share of
joint
ventures
Less: Share 4 (151.0) Nil (151.0) (141.4) Nil (141.4) (277.9)
of joint
ventures'
turnover
Group 4 812.8 Nil 812.8 926.3 Nil 926.3 1,798.7
turnover
Continuing 4 699.5 Nil 699.5 674.3 Nil 674.3 1,335.7
group
operations
Discontinued 4 113.3 Nil 113.3 252.0 Nil 252.0 463.0
operations
812.8 Nil 812.8 926.3 Nil 926.3 1,798.7
Operating (802.0) (5.1) (807.1) (891.3) (594.8) (1,486.1) (2,356.2)
costs
(including
asset
impairment)
Other 3 58.5 Nil 58.5 40.4 Nil 40.4 87.7
operating
income
Operating 4 69.3 (5.1) 64.2 75.4 (594.8) (519.4) (469.8)
profit/(loss)
of group
companies
Share of 2.8 (4.3) (1.5) 6.2 (4.3) 1.9 (6.1)
operating
profit/(loss)
of joint
ventures
Share of 4.8 (0.2) 4.6 5.3 (0.2) 5.1 9.7
operating
profit from
interest in
associates
Total 4 76.9 (9.6) 67.3 86.9 (599.3) (512.4) (466.2)
operating
profit/(loss):
group and
share of
joint
ventures and
associates
Represented
by:
Continuing 4 68.3 (4.1) 64.2 62.8 (590.9) (528.1) (481.3)
group
operations
Joint 4 7.6 (4.5) 3.1 11.5 (4.5) 7.0 3.6
ventures and
associates
75.9 (8.6) 67.3 74.3 (595.4) (521.1) (477.7)
Discontinued 4 1.0 (1.0) Nil 12.6 (3.9) 8.7 11.5
operations
Total 4 76.9 (9.6) 67.3 86.9 (599.3) (512.4) (466.2)
operating
profit/(loss):
group and
share of
joint
ventures and
associates
Loss on sale Nil Nil Nil Nil Nil Nil (0.5)
of properties
- continuing
operations
Loss on Nil (5.9) (5.9) Nil Nil Nil Nil
disposal of
operations
Profit/(loss) 76.9 (15.5) 61.4 86.9 (599.3) (512.4) (466.7)
on ordinary
activities
before
interest and
taxation
Finance (16.6) Nil (16.6) (11.7) Nil (11.7) (33.5)
charges (net)
Profit/(loss) 60.3 (15.5) 44.8 75.2 (599.3) (524.1) (500.2)
on ordinary
activities
before
taxation
Taxation on 5 (17.9) 2.8 (15.1) (17.9) 1.9 (16.0) (25.0)
profit/(loss)
on ordinary
activities
Profit/(loss) 42.4 (12.7) 29.7 57.3 (597.4) (540.1) (525.2)
for the
financial
period
Dividends (11.9) Nil (11.9) (10.6) Nil (10.6) (34.3)
(0.9p per
share (0.8p -
31 October
2002; 2.6p -
full year to
30 April
2003))
Retained 30.5 (12.7) 17.8 46.7 (597.4) (550.7) (559.5)
profit/(loss)
for the
period
Earnings/(loss)
per share
- Basic 6 2.3p (41.2)p (40.0)p
- Basic 6 3.2p 4.4p 6.4p
before
goodwill
amortisation
and
exceptional
items
- Diluted 6 2.2p (41.2)p (40.0)p
The accompanying notes form an integral part of this consolidated profit and
loss account.
CONSOLIDATED BALANCE SHEET
Unaudited Audited
As at As at As at
31 October 31 October 30 April
2003 2002 2003
#m #m #m
-------- -------- --------
Fixed Assets
Intangible assets 111.9 216.3 206.9
Tangible assets 619.0 879.9 851.6
Investments
- Investment in joint
ventures
Goodwill 67.8 77.1 72.7
Share of gross assets 153.1 133.7 167.5
Share of gross liabilities (101.3) (85.9) (122.0)
Shareholder loan notes 10.0 10.0 10.4
-------- -------- --------
129.6 134.9 128.6
-------- -------- --------
- Investment in associates 62.0 69.3 70.0
- Other investments 2.2 2.5 2.7
-------- -------- --------
924.7 1,302.9 1,259.8
-------- -------- --------
Current Assets
Stocks 19.4 38.0 38.1
Debtors and prepaid charges -
due 216.6 241.1 192.3
within one year
- due after more than one year 61.3 48.5 59.9
Cash at bank and in hand 338.1 168.5 164.7
-------- -------- --------
635.4 496.1 455.0
Creditors: Amounts falling
due within (475.5) (530.6) (504.2)
one year -------- -------- --------
Net current assets/ 159.9 (34.5) (49.2)
(liabilities) -------- -------- --------
Total assets less current 1,084.6 1,268.4 1,210.6
liabilities
Creditors: Amounts falling
due after (522.6) (721.1) (640.7)
more than one year
Provisions for liabilities
and charges
- Joint ventures
Goodwill 0.6 Nil Nil
Share of gross assets 4.8 4.6 5.3
Share of gross liabilities (31.5) (23.4) (27.9)
Shareholder loan 3.3 Nil Nil
- Other provisions (202.6) (209.5) (230.2)
-------- -------- --------
Net assets 336.6 319.0 317.1
-------- -------- --------
Capital and reserves
Equity share capital 6.6 6.6 6.6
Share premium account 389.1 384.4 386.1
Profit and loss account* (60.8)* (74.6) (77.3)
Capital redemption reserve 1.7 1.7 1.7
Distribution reserve Nil 0.9 Nil
-------- -------- --------
Shareholders' funds - Equity 336.6 319.0 317.1
-------- -------- --------
The accompanying notes form an integral part of this consolidated balance sheet.
* The profit and loss reserve deficit of #60.8m is the consolidated position
after taking account of cumulative goodwill of #113.8m that was written off
against reserves in periods prior to the adoption of FRS 10 "Goodwill and
Intangible Assets". The holding company's distributable reserves as at 31
October 2003 were #87.3m.
CONSOLIDATED CASH FLOW STATEMENT
Unaudited Audited
6 months to 6 months to Year to
31 October 31 October 30 April 2003
2003 2002
#m #m #m
--------- -------- --------
Notes
Net cash inflow
from operating 7 111.4 113.8 272.2
activities
Dividends from 4.1 2.7 5.3
associates
--------- -------- --------
Returns on
investments and
servicing of
finance
Interest paid (34.2) (18.2) (52.6)
Interest element
of hire purchase (1.7) (2.7) (4.7)
and lease
finance
Interest 36.9 2.7 5.4
received --------- -------- --------
Net cash inflow/ 10 1.0 (18.2) (51.9)
(outflow) from
returns on
investments
and servicing of
finance --------- -------- --------
Taxation (16.2) 1.9 (7.8)
--------- -------- --------
Capital (27.3) (26.1) (52.9)
expenditure and
financial
investment
Purchase of
tangible fixed
assets
Sale of tangible 2.7 6.5 20.1
fixed assets --------- -------- --------
Net cash outflow (24.6) (19.6) (32.8)
for capital
expenditure and
financial
investment
--------- -------- --------
Acquisitions and (6.5) (5.2) (10.1)
disposals
Acquisition of
subsidiaries
Purchase of Nil (0.4) (0.8)
goodwill
Purchase of Nil (0.4) (0.9)
investment in
joint
ventures and
associates
Cash of disposed (4.2) Nil Nil
subsidiaries
Disposal of 261.7 2.0 7.0
subsidiaries and
other businesses
Disposal of 0.9 Nil Nil
associates
Loans to joint (2.9) Nil Nil
ventures
--------- -------- --------
Net cash inflow/ 249.0 (4.0) (4.8)
(outflow) from
acquisitions and
disposals
--------- -------- --------
Equity dividends (23.8) (17.1) (27.6)
paid --------- -------- --------
Net cash inflow 300.9 59.5 152.6
before financing --------- -------- --------
Financing
Sale of tokens 4.0 3.5 12.9
Redemption of (6.1) (5.7) (10.8)
tokens
Issue of share 3.0 Nil Nil
capital for cash
Decrease/ 35.3 (34.2) (32.1)
(increase) in
collateral
balances
Decrease in (126.8) (12.0) (90.9)
borrowings
Repayments of (32.9) (22.7) (44.4)
hire purchase
and
lease finance
Cash inflows 34.9 Nil Nil
from lease
finance
--------- -------- --------
Net cash outflow (88.6) (71.1) (165.3)
from financing --------- -------- --------
Increase/ 8 212.3 (11.6) (12.7)
(decrease) in
cash in
period
--------- -------- --------
Free cash flow 100.3 100.2 217.8
--------- -------- --------
Free cash flow 7.6p 7.6p 16.6p
per share --------- -------- --------
Free cash flow comprises net cash inflow from operating activities, dividends
from associates, net cash inflow/(outflow) from returns on investments and
servicing of finance, and taxation.
The accompanying notes form an integral part of this consolidated cash flow
statement.
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Unaudited Audited
6 months to 6 months to Year to
31 October 31 October 30 April
2003 2002 2003
#m #m #m
-------- --------- --------
Profit/(loss) for the 29.7 (540.1) (525.2)
financial period
Translation differences on (0.5) (33.7) (26.6)
foreign currency net investments
UK tax effect of translation (0.6) (5.5) (6.4)
differences
on foreign currency
net investments
Share of other recognised (0.2) Nil (0.1)
gains and
losses of associates
-------- --------- --------
Total recognised gains and 28.4 (579.3) (558.3)
losses
relating to the period
-------- --------- --------
RECONCILIATION OF MOVEMENTS IN CONSOLIDATED SHAREHOLDERS' FUNDS
Unaudited Audited
6 months to 6 months to Year to
31 October 31 October 30 April
2003 2002 2003
#m #m #m
--------- --------- ---------
Profit/(loss) for the 29.7 (540.1) (525.2)
financial period
Dividends (11.9) (10.6) (34.3)
--------- --------- ---------
17.8 (550.7) (559.5)
Goodwill sold, previously Nil 0.5 0.5
written off to
reserves
Other recognised gains and
losses relating to the
period
-Translation differences on (0.5) (33.7) (26.6)
foreign currency net investments
-UK tax effect of translation (0.6) (5.5) (6.4)
differences on foreign currency
net investments
-Share of other recognised
gains and losses of associates (0.2) Nil (0.1)
Share capital issued less 3.0 Nil 1.7
costs
Distribution reserve decrease Nil (0.7) (1.6)
--------- --------- ---------
Net increase/(decrease) in 19.5 (590.1) (592.0)
shareholders'
funds
--------- --------- ---------
Opening shareholders' funds 317.1 909.1 909.1
--------- --------- ---------
Closing shareholders' funds 336.6 319.0 317.1
--------- --------- ---------
NOTES
1 BASIS OF PREPARATION
The financial information for the six months ended 31 October 2003 has
not been audited, nor has the comparative financial information for the
six months ended 31 October 2002. The comparative financial information
for the year ended 30 April 2003 does not reflect all of the information
contained in the Company's annual accounts. These annual accounts
received an unqualified audit report and have been filed with the
Registrar of Companies.
This announcement was approved by the Board of Directors on 10 December
2003. There have been no changes in accounting policies since those used
in the annual accounts for the year ended 30 April 2003.
The interim report for the six months to 31 October 2003 will be
published in the Financial Times on 11 December 2003. The interim
report, which is extracted from this announcement and which includes the
independent review report by the auditors, has been prepared in
accordance with the Listing Rules of the Financial Services Authority.
The full text of the interim report is included at the end of this
announcement released to the London Stock Exchange.
2 EXCEPTIONAL ITEMS
The following items have been treated as exceptional:
Unaudited Audited
6 months to 6 months to Year to
31 October 31 October 30 April
2003 2002 2003
#m #m #m
--------- --------- ---------
Loss on sale of Coach USA (5.1) Nil Nil
divisions
Gain on sale of Citybus 0.3 Nil Nil
Loss on sale of Chongqing (1.1) Nil Nil
investment
Provision for losses on Nil (7.7) (7.7)
operations to be
terminated or sold
Impairment of tangible fixed Nil (162.7) (162.7)
assets at Coach USA
Write-down of current assets Nil (17.8) (17.8)
to net realisable value at Coach USA
Impairment of goodwill at Nil (386.8) (386.8)
Coach USA
Loss on sale of properties Nil Nil (0.5)
--------- --------- ---------
(5.9) (575.0) (575.5)
Tax effect of exceptional 2.0 Nil Nil
items
--------- --------- ---------
(3.9) (575.0) (575.5)
--------- --------- ---------
Net exceptional charges before tax of #5.9m for the six months ended 31 October
2003 relate to the total pre-tax losses arising on the disposals of Citybus, our
investment in former associated companies operating in the Chinese city of
Chongqing and various parts of Coach USA.
The net exceptional charges before tax of #575.0m in the six months ended 31
October 2002 related to write-downs of the carrying value of Coach USA's assets
following an impairment review conducted as at 31 October 2002. To the extent
that the written-down values as at 31 October 2002 were based on projected cash
flows, the actual cash flows for the six months ended 30 April 2003 were
compared to projections. Actual cash flows were not significantly different to
those projected, and no further write-downs were recorded. There have been no
new events in the six months ended 31 October 2003 that suggest any further
impairment of Coach USA's assets. The directors will update their assessment of
the carrying value of Coach USA's assets as at 30 April 2004.
The directors also undertook an impairment review as at 30 April 2003 of the
carrying value of the Group's 49% joint venture interest in Virgin Rail Group
("VRG") and concluded that there had been no impairment loss. VRG's two train
franchises are presently operating with additional subsidy support from the
Strategic Rail Authority ("SRA") in line with commercial arrangements agreed on
19 July 2002. The value of Stagecoach Group's investment in VRG depends on the
agreement of long-term commercial arrangements with the SRA for the operation of
the franchises. Negotiations are continuing between VRG and the SRA in this
regard but it is not yet known with certainty when agreement will be reached.
The directors of Stagecoach Group have concluded there is no impairment loss at
31 October 2003 and they continue to monitor the situation regularly and to
assess any implications for the Group's investment in VRG. In particular, they
have carefully reviewed the underlying assets and liabilities of VRG and made
appropriate provision where considered necessary in accounting for Stagecoach
Group's share of the consolidated net assets of VRG as at 31 October 2003,
having given due regard to all relevant factors. The directors will update their
assessment of the carrying value of Virgin Rail Group as at 30 April 2004.
3 OTHER OPERATING INCOME
Unaudited Audited
6 months to 6 months to Year to
31 October 31 October 30 April
2003 2002 2003
#m #m #m
--------- --------- ---------
Miscellaneous revenue 21.8 22.1 47.9
Liquidated damages received Nil 7.2 8.5
Losses on disposal of assets, (2.1) (1.3) (2.7)
other than properties
Rail franchise support 38.8 12.4 34.0
--------- --------- ---------
58.5 40.4 87.7
--------- --------- ---------
4SEGMENTAL ANALYSIS
(A)TURNOVER
Unaudited Audited
6 months to 6 months to Year to
31 October 31 October 30 April
2003 2002 2003
#m #m #m
--------- --------- ---------
Continuing operations
UK Bus 317.9 293.8 598.4
New Zealand 26.4 21.5 51.0
Coach USA 138.5 153.0 272.7
--------- --------- ---------
Total bus continuing 482.8 468.3 922.1
operations
Rail 216.7 206.0 413.6
--------- --------- ---------
Total continuing operations 699.5 674.3 1,335.7
Discontinued operations
Citybus 17.8 70.3 132.3
Australia Nil 0.5 0.4
Coach USA 95.5 181.2 330.3
--------- --------- ---------
Group Turnover 812.8 926.3 1,798.7
Share of joint ventures'
turnover
- Virgin Rail Group 149.5 140.6 276.1
- thetrainline 5.4 5.1 11.0
- Elimination of inter-segment (3.9) (4.3) (9.2)
turnover --------- --------- ---------
Group turnover and share of
joint 963.8 1,067.7 2,076.6
ventures' turnover --------- --------- ---------
4 SEGMENTAL ANALYSIS (CONTINUED)
(B) OPERATING PROFIT/(LOSS)
Unaudited Audited
6 months to 31 October 2003 6 months to 31 October 2002
Performance pre Goodwill and Results for the Performance pre Goodwill and Results for Year to
goodwill and exceptional period goodwill and exceptional
exceptionals items exceptionals items
the period 30 April
2003
#m #m #m #m #m #m #m
------- ------- ------- ------- ------- ------- -------
Continuing
operations
UK Bus 34.3 Nil 34.3 31.1 Nil 31.1 67.0
New Zealand 4.9 Nil 4.9 4.4 Nil 4.4 11.2
Coach USA 15.9 Nil 15.9 15.8 (575.0) (559.2) (561.0)
------- ------- ------- ------- ------- ------- -------
Total bus 55.1 Nil 55.1 51.3 (575.0) (523.7) (482.8)
continuing
operations
Rail 21.5 Nil 21.5 18.9 Nil 18.9 38.2
------- ------- ------- ------- ------- ------- -------
Total 76.6 Nil 76.6 70.2 (575.0) (504.8) (444.6)
continuing
operations
Group (4.2) Nil (4.2) (4.5) Nil (4.5) (9.4)
overheads
Goodwill Nil (4.1) (4.1) Nil (15.9) (15.9) (21.0)
amortisation
Redundancy/
restructuring
costs
- Continuing
operations (4.1) Nil (4.1) (2.9) Nil (2.9) (6.3)
------- ------- ------- ------- ------- ------- -------
Total 68.3 (4.1) 64.2 62.8 (590.9) (528.1) (481.3)
operating
profit/(loss)
of continuing
group
companies
Discontinued
operations
- Citybus 1.0 Nil 1.0 12.6 Nil 12.6 19.1
- Goodwill Nil (1.0) (1.0) Nil (3.9) (3.9) (7.6)
amortisation
------- ------- ------- ------- ------- ------- -------
Total
operating
profit/(loss)
of group
companies 69.3 (5.1) 64.2 75.4 (594.8) (519.4) (469.8)
Share of
operating
profit/(loss)
of joint
ventures
- Virgin Rail
Group 5.0 Nil 5.0 7.7 Nil 7.7 7.2
- thetrainline (1.7) Nil (1.7) (1.4) Nil (1.4) (4.3)
- other (0.5) Nil (0.5) (0.1) Nil (0.1) (0.3)
Goodwill Nil (4.3) (4.3) Nil (4.3) (4.3) (8.7)
amortised on
investments
in
joint
ventures
Share of
operating
profit of
associates
- Road King 5.0 Nil 5.0 5.8 Nil 5.8 10.5
- other (0.2) Nil (0.2) (0.5) Nil (0.5) (0.5)
Goodwill Nil (0.2) (0.2) Nil (0.2) (0.2) (0.3)
amortised on
investments
in
associates
------- ------- ------- ------- ------- ------- ------
Total 76.9 (9.6) 67.3 86.9 (599.3) (512.4) (466.2)
operating
profit/
(loss):
group and
share of
joint
ventures and
associates
------- ------- ------- ------- ------- ------- -------
The operating profit from discontinued operations includes Citybus. The
operating profit from the discontinued element of Coach USA is not separately
shown because it is not clearly distinguishable due to certain "shared" costs
that relate to Coach USA as a whole. However, the discontinued element of Coach
USA's operating profit is not believed to be material in the context of the
Group's annual operating profit as a whole.
5 TAXATION
The taxation charge comprises:
Unaudited Audited
6 months to 6 months to Year to
31 October 31 October 30 April
2003 2002 2003
#m #m #m
--------- --------- ---------
Group companies 13.3 15.8 22.4
Share of joint ventures' tax 1.2 Nil 2.0
Share of associates' tax 0.6 0.2 0.6
--------- --------- ---------
15.1 16.0 25.0
--------- --------- ---------
6 EARNINGS/(LOSS) PER SHARE
Earnings/(loss) per ordinary share have been calculated in accordance
with FRS 14 'Earnings per Share', by calculating the profit/(loss) on
ordinary activities after taxation divided by the weighted average
number of ordinary shares in issue during the period based on the
following:
Unaudited Audited
6 months to 6 months to Year to
31 October 31 October 30 April
2003 2002 2003
--------- --------- ---------
Basic weighted average share 1,318.1 1,311.2 1,314.4
capital (number of shares, million)
Dilutive shares
- Executive Share Option 17.3 Nil 2.3
Scheme
- Employee SAYE Scheme 1.3 Nil Nil
--------- --------- ---------
Diluted weighted average share
capital 1,336.7 1,311.2 1,316.7
(number of shares, million) --------- --------- ---------
#m #m #m
--------- --------- ---------
Profit/(loss) after taxation (for basic
EPS 29.7 (540.1) (525.2)
calculation)
Goodwill amortised on subsidiaries 5.1 19.8 28.6
Goodwill amortised on joint ventures 4.3 4.3 8.7
Goodwill amortised on associates 0.2 0.2 0.3
Exceptional items (see note 2) 5.9 575.0 575.5
Tax effect of goodwill amortisation and (2.8) (1.9) (3.8)
exceptional items
--------- --------- ---------
Profit for adjusted EPS calculation 42.4 57.3 84.1
--------- --------- ---------
7 RECONCILIATION OF OPERATING PROFIT/(LOSS) TO NET CASHFLOW FROM
OPERATING ACTIVITIES
Unaudited Audited
6 months to 6 months to Year to
31 October 31 October 30 April
2003 2002 2003
#m #m #m
--------- --------- --------
Operating profit/(loss) of 64.2 (519.4) (469.8)
group companies
Depreciation 34.5 51.6 105.3
Impairment of tangible fixed Nil 162.7 162.7
assets
Impairment of goodwill Nil 386.8 386.8
Loss on sale of tangible fixed 2.1 1.3 2.7
assets, other than properties
Goodwill amortisation 5.1 19.8 28.6
Provision for losses on Nil 7.7 7.7
operations to be
terminated or sold
Distribution reserve Nil (0.7) 0.2
Decrease in stocks 5.4 9.5 11.7
(Increase)/decrease in debtors (24.1) (10.1) 13.6
Increase/(decrease) in 26.1 2.7 (1.7)
creditors
(Decrease)/increase in (1.9) 1.9 24.4
provisions
--------- --------- --------
Net cash inflow from operating 111.4 113.8 272.2
activities
--------- --------- --------
During the period the Group entered into hire purchase arrangements in respect
of new assets with a total capital value at the inception of the contracts of
#14.3m (31 October 2002 - #9.4m).
8 RECONCILIATION OF NET CASHFLOW TO MOVEMENT IN NET DEBT
Unaudited Audited
6 months to 6 months to Year to
31 October 31 October 30 April
2003 2002 2003
#m #m #m
--------- --------- ---------
Increase/(decrease) in cash 212.3 (11.6) (12.7)
Bond repayments 10.7 38.1 40.0
Cash flow from decrease/ 114.1 (3.4) 95.3
(increase) in
debt and lease financing
--------- --------- ---------
337.1 23.1 122.6
Loans of disposed subsidiaries 47.3 Nil Nil
Other movements Nil 57.5 59.9
Movement in cash collateral (35.3) 34.2 32.1
--------- --------- ---------
Decrease in net debt 349.1 114.8 214.6
Opening net debt (560.0) (774.6) (774.6)
--------- --------- ---------
Closing net debt (210.9) (659.8) (560.0)
--------- --------- ---------
9 ANALYSIS OF NET DEBT
Opening Cashflows Cash collateral Acquisitions Other movements Closing
and disposals
#m #m #m #m #m #m
-------- -------- ------- -------- -------- -------
Cash 90.1 212.3 Nil Nil (3.6) 298.8
Cash 74.6 (34.9) (0.4) Nil Nil 39.3
collateral
Hire (80.6) (2.0) Nil Nil (10.6) (93.2)
purchase
and lease
obligations
Bank loans (240.0) 115.7 0.4 47.3 2.2 (74.4)
and
loan stock
Bonds (404.1) 10.7 Nil Nil 12.0 (381.4)
-------- -------- ------- -------- -------- -------
(560.0) 301.8 Nil 47.3 Nil (210.9)
-------- -------- ------- -------- -------- -------
The net total of cash and cash collateral of #338.1m (30 April 2003- #164.7m) is
classified in the balance sheet as cash at bank and in hand. The cash collateral
balance as at 31 October 2003 of #39.3m (30 April 2003 - #74.6m) comprises
balances held in trust in respect of loan notes of #33.9m (30 April 2003 -
#34.3m) and Coach USA letter of credit and insurance collateral cash of #5.4m
(30 April 2003 - #40.3m). In addition, cash includes train operating company
cash of #65.6m (30 April 2003 - #42.9m). Under the terms of the franchise
agreements, train operating companies can only distribute cash out of retained
profits.
10 FINANCE CHARGES
The net cash inflow from returns on investments and servicing of finance of
#1.0m compares to net finance charges of #16.6m reported in the consolidated
profit and loss account. The largest element of the #17.6m difference relates to
a restructuring of interest rate derivatives.
In June 2003, we took advantage of a sharp decline in long term US$ interest
rates to extend the maturity of our fixed rate debt. This was achieved by
closing out a number of interest rate derivatives that were linked to our 2009
US$ bond. As a result of this restructuring we realised a net cash inflow of
#12.3m. This amount will be recognised as income in the profit and loss account
over the life of the original debt.
APPENDIX
Stagecoach Group plc
Interim Report for the six months ended 31 October 2003
(to be published in the Financial Times on 11 December 2003)
Consolidated Profit & Loss Account Unaudited Unaudited Audited
For the six months ended 31 October 2003 6 months ended 6 months ended Year ended 30
31 Oct 2003 31 Oct 2002 April 2003
#m #m #m
Turnover: 963.8 1,067.7 2,076.6
Group and
share of joint
ventures
Less: Share of (151.0) (141.4) (277.9)
joint
ventures'
turnover
--------------------------- ----------- ----------- ----------
Group turnover 812.8 926.3 1,798.7
--------------------------- ----------- ----------- ----------
Continuing 699.5 674.3 1,335.7
group
operations
Discontinued
operations 113.3 252.0 463.0
--------------------------- ----------- ----------- ----------
812.8 926.3 1,798.7
Operating (807.1) (1,486.1) (2,356.2)
costs
(including
exceptional
items of #Nil
(#575.0m - 31
October 2002
and full year
to 30 April
2003))
Other 58.5 40.4 87.7
operating
income
--------------------------- ----------- ----------- ----------
Operating 64.2 (519.4) (469.8)
profit/(loss)
of group
companies
--------------------------- ----------- ----------- ----------
Share of (1.5) 1.9 (6.1)
operating
(loss)/profit
of joint
ventures
Share of 4.6 5.1 9.7
operating
profit from
interest in
associates
--------------------------- ----------- ----------- ----------
Total 67.3 (512.4) (466.2)
operating
profit/(loss):
group and
share of joint
ventures and
associates
--------------------------- ----------- ----------- ----------
Represented by: 64.2 (528.1) (481.3)
Continuing
group
operations
Joint ventures
and associates 3.1 7.0 3.6
--------------------------- ----------- ----------- ----------
67.3 (521.1) (477.7)
Discontinued
operations Nil 8.7 11.5
--------------------------- ----------- ----------- ----------
Total 67.3 (512.4) (466.2)
operating
profit/(loss):
group and
share of joint
ventures and
associates
Loss on sale Nil Nil (0.5)
of properties
- continuing
operations
Loss on
disposal of
operations (5.9) Nil Nil
--------------------------- ----------- ----------- ----------
Profit/(loss) 61.4 (512.4) (466.7)
on ordinary
activities
before
interest and
taxation
Finance
charges (net) (16.6) (11.7) (33.5)
--------------------------- ----------- ----------- ----------
Profit/(loss) 44.8 (524.1) (500.2)
on ordinary
activities
before
taxation
Taxation on (15.1) (16.0) (25.0)
profit/(loss)
on ordinary
activities
--------------------------- ----------- ----------- ----------
Profit/(loss) 29.7 (540.1) (525.2)
for the
financial
period
Dividends (11.9) (10.6) (34.3)
(0.9p per
share (0.8p -
31 October
2002; 2.6p -
full year to
30 April
2003))
--------------------------- ----------- ----------- ----------
Retained 17.8 (550.7) (559.5)
profit/(loss)
for the period
--------------------------- ----------- ----------- ----------
Earnings/(loss) per share
- Basic 2.3p (41.2)p (40.0)p
--------------------------- ----------- ----------- ----------
- Basic before 3.2p 4.4p 6.4p
goodwill
amortisation
and
exceptional
items
--------------------------- ----------- ----------- ----------
- Diluted 2.2p (41.2)p (40.0)p
--------------------------- ----------- ----------- ----------
Consolidated Unaudited Unaudited Audited
Balance Sheet
As at 31 October 31 Oct 2003 31 Oct 2002 30 April 2003
2003
#m #m #m
---------------- ------- ------ -------
Fixed Assets
Intangible 111.9 216.3 206.9
assets
Tangible
assets 619.0 879.9 851.6
Investments 193.8 206.7 201.3
---------------- ------- ------ -------
924.7 1,302.9 1,259.8
---------------- ------- ------ -------
Current Assets
Stocks 19.4 38.0 38.1
Debtors and
prepaid
charges
- due within
one year 216.6 241.1 192.3
- due after 61.3 48.5 59.9
more than one
year
Cash at bank
and in hand 338.1 168.5 164.7
---------------- ------- ------ -------
635.4 496.1 455.0
Creditors: (475.5) (530.6) (504.2)
Amounts
falling due
within one
year
---------------- ------- ------ -------
Net current 159.9 (34.5) (49.2)
assets/(liabilities)
---------------- ------- ------ -------
Total assets 1,084.6 1,268.4 1,210.6
less current
liabilities
Creditors: (522.6) (721.1) (640.7)
Amounts falling
due after more
than
one year
Provisions for (225.4) (228.3) (252.8)
liabilities
and charges
---------------- ------- ------ -------
Net assets 336.6 319.0 317.1
---------------- ------- ------ -------
Capital and 6.6 6.6 6.6
reserves
Equity share
capital
Share premium 389.1 384.4 386.1
account
Profit and
loss account (60.8) (74.6) (77.3)
Capital 1.7 1.7 1.7
redemption
reserve
Distribution Nil 0.9 Nil
reserve
---------------- ------- ------ -------
Shareholders'
funds - Equity 336.6 319.0 317.1
---------------- ------- ------ -------
Consolidated Cash Flow Statement
For the six months ended 31 October 2003
Unaudited Unaudited Audited
6 months 6 months Year
ended ended Ended
31 Oct 2003 31 Oct 2002 30 April 2003
#m #m #m
---------------- ------- ------ -------
Net cash 111.4 113.8 272.2
inflow from
operating
activities
Dividends from 4.1 2.7 5.3
associates
Returns on 1.0 (18.2) (51.9)
investments
and servicing
of finance
Taxation (16.2) 1.9 (7.8)
Capital (24.6) (19.6) (32.8)
expenditure
and financial
investment
Acquisitions 249.0 (4.0) (4.8)
and disposals
Equity
dividends paid (23.8) (17.1) (27.6)
---------------- ------- ------ -------
Net cash 300.9 59.5 152.6
inflow before
financing
Financing (88.6) (71.1) (165.3)
---------------- ------- ------ -------
Increase/(decrease)
in cash in the period 212.3 (11.6) (12.7)
---------------- ------- ------ -------
Free cash flow 100.3 100.2 217.8
---------------- ------- ------ -------
Free cash flow
per share 7.6p 7.6p 16.6p
---------------- ------- ------ -------
Chairman's Statement
Stagecoach Group has enjoyed a strong trading performance in the first six
months of the year. Operating profit at each of UK Bus, Rail, Coach USA and New
Zealand is up on the same period last year and we are encouraged by the
particularly strong growth in our UK bus and rail businesses. Across the Group,
we have a strong portfolio of profitable and cash generative businesses.
We have continued to reduce our net debt from a combination of cash flows
generated by our operations and business disposals. This will bring long-term
benefits to the business. Net debt reduced by 62.3% in the six months ended 31
October 2003, down from #560.0m to #210.9m.
Total turnover for the six months was #963.8m (2002 - #1,067.7m). Total
operating profit (before goodwill amortisation and exceptional items) was #76.9m
(2002 - #86.9m). The fall in operating profits largely reflects the disposal of
Citybus. Excluding Citybus, operating profit on an equivalent basis was up from
#74.3m to #75.9m.
The Directors have declared an interim dividend of 0.9p per share (2002 - 0.8p)
and this reflects the Board's confidence in the prospects for the Group. Based
on continued strong and stable cash flows and profits within the business, we
will look to progressively grow the dividend.
We have made an encouraging start to the second half of the year and I am
pleased to report that the current trading of the Group remains in line with the
expectations set out in the Company Statement of 21 October 2003. I believe that
the Group's portfolio of businesses offers good prospects for further growth and
increased shareholder value.
Robert Speirs, Chairman
Independent Review Report to Stagecoach Group plc
Introduction
We have been instructed by the company to review the financial information which
comprises the consolidated profit and loss account, consolidated balance sheet,
and consolidated cash flow statement. We have read the other information
contained in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
Directors' Responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the Directors. The Directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review Work Performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with UK Auditing Standards and therefore provides a
lower level of assurance than an audit. Accordingly we do not express an audit
opinion on the financial information. This report, including the conclusion, has
been prepared for and only for the company for the purpose of the Listing Rules
of the Financial Services Authority and for no other purpose. We do not, in
producing this report, accept or assume responsibility for any other purpose or
to any other person to whom this report is shown or in to whose hands it may
come save where expressly agreed by our prior consent in writing.
Review Conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 October 2003.
PricewaterhouseCoopers LLP, Chartered Accountants, Glasgow 10 December 2003
This information is provided by RNS
The company news service from the London Stock Exchange
END
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