Stagecoach retreats from train bids as profits rise

Bus and rail operator Stagecoach Group has said it has no intention to bid for new UK rail franchises after its operations end in November.

The statement came as the public transport giant recorded a rise in annual profits, despite facing the loss of three important rail franchises.

The company said pre-tax profit from continuing operations rose 3.6% to £132.9m for the year ending on 27 April, from £128.3m a year earlier.

Revenue from continuing operations for the year dropped by 33% to £1.88bn, from a restated £2.82bn in 2018.

Stagecoach said the revenue slump was due to its South West Trains franchise and Virgin Trains East Coast franchises coming to an end in August 2017 and June 2018 respectively.

The train operator launched legal action against the government in May , after it was disqualified from bidding for a series of rail franchises.

Stagecoach prepared a claim for a judicial review, saying the Department for Transport "breached its statutory duties" when it blocked Stagecoach's bid to run the East Midlands network.

The company has also been barred from bidding for the West Coast mainline - which it currently runs in a joint venture with Virgin Trains - as well as a new South Eastern franchise.

Revenue from Stagecoach's UK bus business was higher despite an overall decline in bus travel across the UK, as passenger shop more online and change their working patterns.

Shares rose almost 3% by the close on Wednesday.

Stagecoach chief executive Martin Griffiths said: "We continue to focus on driving growth at our core high quality bus and coach operations in the UK, but we have no intention to bid for new UK rail franchises on the current risk profile offered by the Department for Transport."

Deputy chairman Will Whitehorn will step down from the Stagecoach board on 30 June next year, when he will have served for nine years and be regarded as non-independent based on the criteria for independence stated in the UK Corporate Governance Code.

He will be succeeded by Ray O'Toole, who joined the board as a non-executive director in September 2016.