Stagecoach will stop its share buy back programme once it has reached £30m, the transport giant announced this morning.
Earlier this year, the firm announced a share buy back programme worth up to £60m over the next year following the government’s decision to bar it from three rail franchises.
In a trading update today, Stagecoach said it had already bought back 21,830,035 ordinary shares at a cost of approximately £28.5m.
“The board is satisfied that the programme has largely achieved its objective of making appropriate use of our cash, whilst retaining a good financial position and maintaining an investment grade credit rating,” it said.
“In line with the company’s strong capital discipline, the board now plans to continue the programme until around £30m of shares have been bought back.”
Stagecoach also confirmed it will take the government to court over its decision to bar it from three rail franchises early next year.
The bus and rail operator is suing the Department for Transport (DfT) over its decision to disqualify it from the East Midlands, South Eastern and West Coast franchises earlier this year over its refusal to share pensions liabilities with the government.
“We continue to pursue our claims against the secretary of state for transport regarding his decisions to disqualify us from three rail franchise competitions,” Stagecoach said in a trading update. “The three cases are due to be heard in the High Court in early 2020.”
The operator said its performance in the bus division had been in line with expectations and that in London, it won more income based on it providing a “favourable” service. It added it was confident it would keep winning contracts with Transport for London (TfL) in the capital.
Like-for-like revenue growth at the UK bus (regional operations) division was one per cent for the 20 weeks ended 14 September 2019, which was lower than anticipated. Stagecoach blamed this on last year’s hot summer and this year’s poorer weather.
Stagecoach will announce its half-year results on 11 December 2019.