Stagecoach cuts profit view as customers reduce city trips

* HY EPS up 13 pct on yr earlier period to 17 pence

* Shares (Berlin: DI6.BE - news) down 13 pct (Adds FD comments, analyst comment, share price,)

By Sarah Young

LONDON, Dec (Shanghai: 600875.SS - news) 9 (Reuters) - British rail and bus company Stagecoach said customers had cut back journeys to big cities since last month's deadly attacks in Paris, leading it to trim its annual profit forecast.

The firm, whose megabus.com services operate between British and European cities including Paris, said on Wednesday it believed the attacks which killed 130 people in the French capital on Nov. 13 had discouraged people from taking trips.

Shares in the FTSE 250 company fell 13 percent to 308 pence in early trading, their lowest value for two and a half years.

Revenue growth in parts of its inter-city coach business and its UK rail units which connect London, Manchester and Edinburgh, had dropped over the last month, Stagecoach said.

Prior to the downgrade, analysts had expected Stagecoach to report annual earnings per share (EPS) of 29.3 pence for the year ended April (LSE: 0N69.L - news) 30, according to a Thomson Reuters (Dusseldorf: TOC.DU - news) poll.

Nomura on Wednesday cut its EPS forecast by 5 percent to 28.3 pence, a move which Stagecoach finance director Ross Paterson said was a "fair reflection".

LESS LEISURE TRAVEL

Stagecoach said discretionary travel had been worst hit with fewer journeys to London on its South West train network outside usual commuter times and between London and Oxford on its regular coach service, in addition to the reduced demand for longer inter-city travel in Britain and Europe.

But a recovery was now underway, Paterson said in an interview.

"We are certainly seeing it recovering, the growth rates, particularly over the last week, they're starting to pick-up again," he said.

The downgrade to annual EPS was also a result of softer than expected revenue at a number of local bus businesses in Britain, Stagecoach said, which Paterson partly blamed on severe weather in northern parts of England over the last week.

The plunge in Stagecoach's share price was also fuelled by other bad news in the company's statement, Nomura analyst James Hollins said.

"The combination of a cautious outlook, withdrawal from the East Anglia rail bidding process and clear indication from management that exceptional shareholder returns should not be expected near-term are likely to drive market concerns," he said.

He retained a "buy" rating on the stock, but cut his target price to 410 pence from 430 pence.

For the six months ended Oct (HKSE: 3366-OL.HK - news) . 31, Stagecoach reported adjusted earnings per share of 17 pence, 13 percent higher than the same period last year. (Editing by Kate Holton and Mark Potter)