Stagecoach rail division faces challenge
Revenue from Virgin Rail Group's West Coast main line franchise, which includes services from Shrewsbury and Telford to London, was up by by 4.6 per cent in the year to the end of April.
Stagecoach Group, which owns 49 per cent of the rail operation, said today that it was on course to achieve expectations of overall adjusted earnings per share for the year.
Stagecoach said the outlook for the UK rail industry was more challenging than it was at this time last year and the overall industry rate of revenue growth has slowed in recent months.
Like-for-like rail revenue growth in its UK rail division, principally South West Trains and East Midlands Trains, was 2.5 per cent in the 48 weeks.
"We believe the reduced rate of growth reflects the effects of weakening consumer confidence, increased terrorism concerns, sustained lower fuel prices, the related effects of car and air competition, slower UK GDP growth and slowing growth in real earnings.
"We have taken and will take further steps to mitigate the effects of lower revenue growth, focussing on cost control and additional initiatives to grow revenue. We continue to work constructively with the Department for Transport and other industry partners to meet our obligations, manage contract changes and ensure the continued stability and growth of our rail businesses," the group said in today's trading statement.
Its UK regional bus operations were ahead 0.2 per cent and London by 1.1 per cent for the 48-week period to April 2.
Overall for UK bus and coach operations revenue growth was low and in light of that Stagecoach plans to keep fare increases for the year ahead to a minimum and will look to stimulate demand through those low fare increases, enhanced marketing and the further development and promotion of its digital offering.
