TIDMSGC
RNS Number : 4564E
Stagecoach Group PLC
04 November 2015
4 November 2015
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
Recent trading has been consistent with our expectations and
there is no change to the adjusted earnings per share that we are
anticipating for the year ending 30 April 2016.
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 - twenty four weeks ended
operations) 17 October 2015 1.0%
- twenty four weeks ended
UK Bus (London) 17 October 2015 1.4%
UK Rail
(excluding Virgin - twenty four weeks ended
Trains East Coast) 17 October 2015 5.8%
North America - five months ended 30
(including Megabus.com) September 2015 (5.6)%
- twenty four weeks ended
Virgin Rail Group 17 October 2015 8.7%
UK Bus (regional operations)
The UK Bus (regional operations) Division's like-for-like
revenue growth continues to come principally from commercial on and
off bus revenue, which is the revenue we receive directly from
passengers in respect of travel on our bus services.
Concessionary revenue growth remains modest. Revenue from
tendered and school services provided under contract has continued
to decline, as a result of local authorities reducing spending on
supported services due to budget constraints.
Overall, estimated passenger journey numbers for the Division in
the 24 weeks were 0.3% below last year, which is consistent with
trends reported earlier this year.
Our expansion of the megabus.com inter-city coach operations in
mainland Europe is progressing and we remain positive about the
growth opportunities in that market. We are accelerating our
expansion plans with the launch of domestic services in France
following the French Government's decision to liberalise inter-city
bus routes of at least 100km in distance from August 2015.
Accordingly, we now expect net start-up losses of around GBP15m for
the year ending 30 April 2016, which is around GBP5m higher than
our previous expectations.
Trading elsewhere at our UK Bus (regional operations) Division
is in line with expectations.
UK Bus (London)
Trading at the UK Bus (London) Division is consistent with our
expectations, with reported revenue growth reflecting the profile
of contracts the Division has with Transport for London. Growth
continues to be impacted by congestion resulting from road works,
which affects the revenue the business receives as Quality
Incentive Income based on its operational performance.
UK Rail
The UK Rail Division continues to perform strongly and we have
revised up our forecast of 2015/16 UK Rail operating profit to
reflect continued good cost control and clarity around the terms of
the new East Midlands Trains franchise.
In September 2015, the Group agreed a new East Midlands Trains
franchise direct award with the Department for Transport ("DfT"),
which commenced on 18 October 2015 and is scheduled to run until 4
March 2018. The DfT has the option to extend the contract by up to
one year on commercial terms that have already been agreed.
The Group has submitted its bid for a new Transpennine Express
franchise and its joint venture with Abellio is shortlisted to bid
for a new East Anglia franchise. The successful bidder for
Transpennine Express is expected to be announced in December 2015,
with the franchise commencing in April 2016. The winner of the new
East Anglia franchise is expected to be announced in June 2016,
with the franchise commencing in October 2016.
North America
The fall in fuel prices continues to impact demand adversely for
our megabus.com inter-city coach services, with like-for-like
revenue at megabus.com North America in the five months ended 30
September 2015 being 5.9% below the equivalent period last year.
Trading elsewhere in the North America division and its joint
venture, Twin America, is broadly in line with our expectations.
Sightseeing and some other leisure-related businesses continue to
be adversely impacted by competition and the strength of the US
dollar.
Virgin Rail Group
Virgin Rail Group's West Coast rail franchise continues to
perform strongly and that is benefitting taxpayers through profit
share payments by the business to the UK DfT.
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, increased from
30 April 2015, reflecting additional investment in our bus fleet,
the acceleration of interest and premium payable associated with
redeeming our 5.75% bonds and the reversal of some favourable UK
Rail working capital timing differences in the previous financial
year, partly offset by continued strong cash generation from
operations.
The Group issued GBP400m of 10-year bonds with an annual coupon
of 4.00% on 29 September 2015. The Group subsequently redeemed the
GBP400m of 5.75% bonds that were due to mature in December 2016.
The premium payable to redeem the 5.75% bonds in excess of their
par value, together with the cost of terminating interest rate
swaps that became ineffective as a result of the re-financing, will
be approximately GBP23m. As previously reported, we intend to
recognise the actual cost of this as an exceptional item in the
Group's consolidated income statement for the six months ended 31
October 2015.
Outlook
Overall current trading is satisfactory and we remain on course
to meet our expectations for the year.
Interim results
The Group plans to announce its interim results for the six
months ended 31 October 2015 on 9 December 2015.
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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