Cities Avoided After Paris Attack, Bus Firm Says

Transport operator Stagecoach has warned of lower profit expectations as a result of the Paris terror attacks discouraging passengers from travelling to major cities.

Stagecoach said it had seen a drop-off in revenue growth for parts of its rail and inter-city coach operations in the UK and continental Europe since mid-November.

The profit warning saw shares fall 14%. It (Other OTC: ITGL - news) comes after terrorists killed 130 people in the French capital on 13 November.

Stagecoach, whose megabus.com services operate between British and European cities including Paris, said: "We believe that revenue has been adversely affected by the terrorist attacks in Paris discouraging people from travelling to major cities."

It added that it expected growth rates to recover. The group has also seen weaker than expected revenue at a number of its regional UK bus businesses.

Stagecoach said that as a result of these factors it had "modestly revised down" a key earnings metric forecast for the year to the end of April (LSE: 0N69.L - news) .

The group issued the warning as it published half-year results showing revenues surged 28% to £1.97bn in the six months to the end of October though pre-tax profits slipped 8% to £90.8m, weighed down by financing charges.

Stagecoach said it saw revenue growth in its UK bus and rail businesses though the latter has seen the improvement slow on inter-city routes in recent weeks. In the US, demand for coach services has been hit by the fall in oil prices making car driving cheaper.

This has had an impact, though smaller, on UK bus operations as well.

Stagecoach chief executive Martin Griffiths said the company was investing in making travel better and easier for customers and called for the public sector to "tackle the growing challenge of road congestion" – another factor that weighed on its bus business.

Meanwhile, the firm has seen its deal to run the East Midlands trains extended and its joint venture with Virgin to run the West Coast mainline is also expected to continue. The two firms also run the East Coast mainline jointly.