RNS Number:4445N
Stagecoach Group PLC
11 July 2003

11 July 2003

STAGECOACH GROUP SIGNS NEW SOUTH WEST TRAINS DEAL

Stagecoach Group is pleased to announce that it has now signed a deal with the
Strategic Rail Authority ("SRA") for the South West Trains franchise.

This will come into effect on 1 February 2004 and is for a minimum term of three
years, expiring on 4 February 2007. It follows the one-year extension to the
existing franchise agreed last year. There is also an option to extend the deal
for a further five years subject to the agreement of both parties.

Stagecoach Group is confident that the agreement - covering the country's
biggest rail franchise - provides significant added benefits for passengers,
reinforces the positive financial prospects of the Group, has the right balance
of risk and return, and will deliver consistent value to shareholders.

The franchise places responsibility for funding and delivering infrastructure
projects with the SRA, leaving South West Trains to focus on delivering a better
train service to passengers.

Highlights of the new deal include:

   *The replacement of the Mark 1 trains with a new #645million pound fleet
    of modern Desiro trains, Britain's biggest order for new trains;

   *A comprehensive plan to improve punctuality, including making rolling
    stock route-specific, measures to boost rolling stock reliability, and
    timetable initiatives;

   *The refurbishment of the inner suburban 455 fleet to improve reliability
    and passenger comfort;

   *#6 million to fund on-going fleet reliability improvements;

   *Revenue and profit-sharing agreement with the SRA;

   *A commitment to carry out a repainting programme at 75 stations;

   *The introduction of new state-of-the art automatic ticket machines;

   *Continued funding for a number of recently introduced evening and late
    night services and for existing integrated transport initiatives such as bus
    links and small car schemes;

   *Continuation of the Passengers' Panel.

There are also optional projects in the franchise, which include:

   *Work to improve passenger circulation at Waterloo Station;

   *The recast of the Windsor line services to provide more track capacity
    for additional peak services.

Brian Souter, Stagecoach Group Chief Executive, said: "We are delighted to have
signed the new South West Trains deal, which is a major step forward for the
Group. It is an excellent deal for Government, our passengers, our shareholders
and our people. We are confident the terms of the new deal will allow us to
generate a stable and predictable return for our shareholders over the life of
the franchise."

Graham Eccles, Executive Director Rail at Stagecoach Group, added: "South West
Trains is the busiest rail franchise in the country and this cements our
position as a major operator within the UK rail market. We look forward to
continuing to work closely with the SRA on the delivery of the future strategic
direction of the railways."

ENDS

Enquiries to:

Steve Stewart, Stagecoach Group, 01738 442111

Jane Lee, South West Trains, 020 7620 5229

John Kiely, Smithfield Financial, 020 7360 4900


NOTES TO EDITORS

   *Stagecoach Group is a leading international transportation group, with
    operations in the UK, North America and New Zealand.

   *The Group's businesses - which include bus, train, tram, express coach,
    taxi and ferry operations - operate around 20,000 vehicles and rolling stock
    and employ more than 30,000 people across the globe.

   *South West Trains operates more than 1,700 services a day into and out of
    London Waterloo. Around 142 million passenger journeys a year are made
    across 11 counties in the south and south west of England.

   *Stagecoach Group is the current franchisee of South West Trains and took
    over operation of the franchise in February 1996.




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