Stagecoach expecting to cash in on recession

By NICK GOODWAY FOR MAILONLINE
Updated:


Trains, buses and coaches group Stagecoach sees the recession driving more people from their expensive cars onto its cheaper buses and trains.

If nothing else, it said today, it expects to be 'relatively resilient to the effects of declining economic growth.'

But there are already signs, particularly in the U.S., that travellers are looking for cheaper options.

Stagecoach said trading is in line with expectations so far this year and the outlook remains positive.


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Positive: Passengers will be looking to cut down on travel costs and Stagecoach is ready to benefit, says chief executive Brian Souter


In a statement to the Stock Exchange, the group founded by chief executive Brian Souter said: 'As consumers experience increased costs in general and higher motoring costs in particular, the group's good-value bus, train and tram services continue to attract passengers from other modes of transport. In particular, value products such as Megabus in North America and advance-purchase rail tickets in the UK are gaining popularity.'

Stagecoach is keen to play the green card, adding: 'This, combined with increasing environmental awareness, the group's strong operational performance and new and innovative products, continues to drive revenue growth.'



In the 24 weeks to 12 October stagecoach's UK bus division, which carries some two million passengers a day and runs 7000 buses in the country, saw like-for-like revenues rise 9.2 per cent. That is almost exactly the same growth it reported in August. When acquisitions are included, revenues rose by 11.7 per cent.

Train revenues slowed in august-October, with 24-week growth at 8.3 per cent. Losing the reading-to-Brighton service to a rival accounted for a 1 per cent decline or revenues would have been up on the earlier period. a blot on the rail landscape is Virgin Trains, where Stagecoach owns 49 per cent and Sir Richard Branson's group 51 per cent.

Its revenues fell around 2 per cent in the last eight weeks due to disruption caused by works on the West Coast line. But Virgin rail will receive compensation so overall profitability will not suffer.

North American revenues have grown more rapidly in the last two months with the 24-week total up 8.4 per cent. Stagecoach said it was benefiting from 'favourable conditions for bus and coach travel'.

It also said it was pleased with the development of Megabus in the US. Launched two years ago, it travels between 32 cities with fares starting at $1 (62p) on a booking system of first come gets cheapest fares.

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