Stagecoach reports mega rise in profits

Kasmira Jefford
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STAGECOACH has reported a 27 per cent jump in full-year profits, saying that rising petrol prices and increasing road congestion has encouraged more people opt for public transport instead of taking their car.

The British bus and rail group posted a pre-tax profit of £205.7m while group revenues rose from £2.2bn to £2.4bn for the year to the end of April. It hiked its full-year dividend by 9.2 per cent to 7.1p.

Stagecoach also reported that expansion of its budget coach brand Megabus was driving growth in its US business, where total revenues were up 8.3 per cent at $461.7m (£287m).

The company, which re-entered the London bus market last year after buying the East London Bus Group, said sales at its UK bus unit rose 2.1 per cent during the period.

“We are seeing growing demand for our bus and rail services in the UK and North America, with further evidence of modal shift as consumers look for better value and more convenient transport alternatives to the rising cost of motoring and increasing road congestion,” said Brian Souter, Stagecoach chief executive.

Revenue at its UK rail business, which includes the South West Trains, grew 4.2 per cent during the year.

Analysts at Panmure Gordon said the results were “marginally” ahead of expectations and gave Stagecoach a “buy” rating.

Shares in the group climbed two per cent to close at 255.20p.