Stagecoach warns on its growth plan

STAGECOACH, the bus and rail group which was jilted by rival National Express in its takeover bid last week, said yesterday its revenue growth remained constrained due to tough trading conditions.<br /><br />But profitability since May was in line with expectations, while like-for-like revenues at its rail arm in the UK grew 1.7 per cent in the three months to October, the group added. <br /><br />Sales growth at its UK bus unit was&nbsp; up 4.3 per cent during the period, while its North American coaches operation posted a 6.8 per cent decline in revenues in the third quarter, compared to a 5.8 per cent slump in the three months to the end of July.<br /><br />Rival transport groups Go-Ahead and Arriva last week said revenues were growing steadily across their bus and rail operations.<br /><br />&ldquo;Although rail revenue growth appears, in our view, to be showing tentative signs of recovery, management highlights that trading conditions remain challenging, especially in rail,&rdquo; said Arbuthnot analyst Gerald Khoo.<br /><br />The company is expected to report an average pre-tax profit of &pound;127.17m for the year to the end of April 2010.<br /><br />Stagecoach added that its financial position remains strong and that it has significant undrawn bank facilities.