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Revenue rise brings increased dividend for Stagecoach shares
THE parent company of East Midlands Trains, which was bailed out by a £46m Government grant last year after making a £25m loss, reported a slight rise in revenues and a small dip in profits as it prepares to expand its Megabus services in the US and Europe.
Stagecoach reported likefor- like revenue was up 6.9 per cent across the group to £2.6bn from £2.4bn in the year ending April 29, reflected in a ten per cent hike in the dividend to 7.8p.
The UK Rail division saw its operating profit down 40 per cent to £27.1m in the year to April 30, compared with £48.4m for the same period the previous year.
The group said this was a result of East Midlands Trains gaining lower than expected passenger revenues, making it eligible for a Government revenue support grant under the terms of its franchise.
The franchise, which has been running local and London services in the region for five years, incurred a £25m loss in six months and received £46,443,000 in Government revenue support grants between last November and June, returning it to profitability.
Scottish-based Stagecoach said in its statement: “We have a strong and profitable rail portfolio and our whollyowned franchises recognised net premium payments of £283.1m in 2011-12 to the Department for Transport, ensuring taxpayers share in our success.”
South West Trains is continuing its joint plan with Network Rail to improve customer service after the National Passenger Survey, published in January, found a drop in performance in the three months to January 7, with punctuality dropping to 86.8 per cent in the final four weeks of that period.
Stagecoach, which jointly owns Virgin Rail with Richard Branson’s Virgin Group, has been shortlisted for the Greater Western and Thameslink rail franchises.
Virgin’s bid to win back the West Coast Main Line franchise, which runs from London to Scotland, is ongoing after the Department for Transport initially awarded the 13-year franchise to rival FirstGroup, a decision which was overturned when flaws in managing the bidding process were revealed. Virgin will continue to run the franchise until a final decision is made within the next year.
Regional bus groups were reported as delivering good returns, despite subsidy cuts and rising fuel prices.
Overseas, the group is expanding its budget coach brand, Megabus, in both Europe and its fastest-growing division, the US and Canada, where the group covers 90 cities and has expanded to the south-west.
Chief executive Sir Brian Souter said: “Across our business, our new ideas and partnerships are helping shape the future of public transport.”
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