TIDMSGC

RNS Number : 4254W

Stagecoach Group PLC

27 April 2016

Trading statement

27 April 2016

Introduction

Stagecoach Group plc is today (27 April 2016) providing a pre-close trading update in respect of its financial year ending 30 April 2016, ahead of a series of meetings with analysts. The Group is on course to achieve our expectation of overall adjusted earnings per share for year ending 30 April 2016.

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        - forty eight weeks ended 2 
  operations)                        April 2016 0.2% 
 UK Bus (London)         - forty eight weeks ended 2 
                                     April 2016 1.1% 
 North America        - eleven months ended 31 March 
                                         2016 (3.4)% 
 UK Rail                 - forty eight weeks ended 2 
                                     April 2016 2.5% 
 Virgin Rail Group       - forty eight weeks ended 2 
                                     April 2016 4.6%

UK Bus (regional operations)

Trading at UK Bus (regional operations) is consistent with our recent expectations.

UK bus and coach operations

Revenue growth in the UK over the last year has been low. In light of that, we plan to keep fare increases for the year ahead to a minimum and will look to stimulate demand through those low fare increases, enhanced marketing and the further development and promotion of our digital offering.

European coach operations

As our megabus.com inter-city coach business in mainland Europe has developed, we have reported that business within the results of the UK Bus (regional operations) Division. At this early stage in its development, the mainland European business remains loss-making. We intend to report that business as a separate segment to provide a clearer view of its financial performance distinct from the UK businesses and will reflect that in our financial statements for the year ending 30 April 2016.

UK Bus (London)

The London bus operations continue to perform in line with our expectations. As previously reported, we expect to see some decline in the operating margin of the Division but still aim to deliver long-term operating margins in excess of 7%.

North America

The North America Division is trading in line with our expectations. The eleven-month like-for-like revenue decline of 3.4% reflects 6.4% decline for megabus.com and 2.1% for the other businesses in North America.

UK Rail and Virgin Rail Group

The outlook for the UK rail industry is more challenging than it was at this time last year. Although growth trends continue to vary across the different parts of the rail industry, the overall industry rate of revenue growth has slowed in recent months. Reflecting those softer trends, like-for-like rail revenue growth in our own UK Rail Division (principally South West Trains and East Midlands Trains) was 2.5% in the forty eight weeks, revenue growth at Virgin Trains East Coast was 4.9% and revenue growth at Virgin Rail Group's West Coast franchise was 4.6%. We believe the reduced rate of growth reflects the effects of weakening consumer confidence, increased terrorism concerns, sustained lower fuel prices, the related effects of car and air competition, slower UK GDP growth and slowing growth in real earnings.

We have taken and will take further steps to mitigate the effects of lower revenue growth, focussing on cost control and additional initiatives to grow revenue. We continue to work constructively with the Department for Transport and other industry partners to meet our obligations, manage contract changes and ensure the continued stability and growth of our rail businesses.

Preliminary results

The announcement of the Group's preliminary results for the year ending 30 April 2016 is scheduled for Wednesday 29 June 2016.

Further information

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 company news service from the London Stock Exchange

END

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April 27, 2016 02:00 ET (06:00 GMT)

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