Stagecoach Group PLC Trading Statement (1615B)

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RNS Number : 1615B

Stagecoach Group PLC

19 September 2018

Trading statement

19 September 2018

Introduction

Stagecoach Group plc is today (19 September 2018) providing a trading update in respect of its financial year ending 27 April 2019, ahead of a series of meetings with analysts.

We are pleased to have made a good start to the year and our forecast of the Group's adjusted earnings per share for the year is broadly unchanged from when we announced our full year results in June 2018.

Revenue growth

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) - sixteen weeks ended 18 August 2018 3.2%

UK Bus (London) - sixteen weeks ended 18 August 2018 (2.2)%

North America - four months ended 31 August 2018 (3.8)%

   UK Rail (excluding Virgin Trains East Coast)      - sixteen weeks ended 18 August 2018    2.1% 

Virgin Rail Group - sixteen weeks ended 18 August 2018 5.3%

UK Bus (regional operations)

Our UK Bus (regional operations) Division has performed well during the period, which we believe is partly attributable to the favourable summer weather throughout the country. We have also benefitted from revenue earned from providing additional bus services to replace train services that were affected by planned resignalling work at Derby railway station. Our expectation is that revenue growth will moderate over the remainder of the year, reflecting the one-off benefits in the year to date.

Like-for-like vehicle miles operated were 1.4% lower than in the previous year, consistent with the plan we set out in June. Like-for-like revenue per vehicle mile grew 4.7% and like-for-like revenue per journey also increased 4.7%.

UK Bus (London)

The reported revenue decrease for the UK Bus (London) Division is in line with our expectation and reflects the impact of contracts lost in the prior year. Operating costs are higher than budgeted due to the lag in fuel price rises being reflected in contract revenue, higher operating costs during the hot weather and the start-up costs of our new sightseeing service. We are disappointed with our performance on current year tenders for Transport for London contracts, which will result in an increase in the rate of revenue decline later on in the year. Nevertheless, we continue to see positive opportunities to improve the revenue and profitability of the Division over the longer term and we will maintain our discipline in bidding for new contracts.

North America

The like-for-like revenue decline of 3.8% for the Division includes 1.8% decline for megabus.com North America. megabus revenue per mile for the period was up 3.8%. Trading at the other businesses in North America remains in line with our expectations. Like-for-like revenue at these businesses decreased by 4.7%, reflecting the benefit in the equivalent period last year from rail replacement contracts linked to train disruptions on New Jersey Transit and Long Island Rail Road.

UK Rail and Virgin Rail Group

The financial performance of our rail businesses is broadly in line with our expectations with continued good profitability at both East Midlands Trains and Virgin Rail Group's West Coast Trains.

As expected, revenue growth at our East Midlands Trains franchise has been suppressed, due to the effects of both the reduced services to accommodate changes to the Thameslink network effective May 2018 and the current year resignalling programme at Derby railway station.

Interim results

The next planned update is the announcement of the Group's interim results for the half-year ended 27 October 2018 on 5 December 2018.

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.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

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September 19, 2018 02:00 ET (06:00 GMT)