Stagecoach profits dented by rail unit

City A.M. Reporter
British bus and rail operator Stagecoach reported a slight fall in full-year profit after its UK rail business delivered a worse-than-expected performance.

Scotland-based Stagecoach said its pretax profit for the year to the end of April fell 1.5 per cent to £202.5m on revenues 8.4 per cent higher at £2.59bn.

"This reduction was principally due to losses incurred at East Midlands Trains in the first half of the year where revenue was below the level forecast when the contract was originally awarded, and the premium payments made to the Department for Transport were agreed," the company said in a statement.

Stagecoach, which is shortlisted for a number of new franchises, added that East Midlands Trains had returned to profit in the second half and South West Trains continued to perform well.

Stagecoach, which transports some 2.5m passengers a day, said its British bus and North American coaches unit performed well during the year.

The company, which last month agreed to buy some of struggling Coach America's U.S. businesses, said trading since its financial year end had been steady.

The transport group increased the full year dividend by 10 per cent to 7.8 pence per share.