Ahead of a series of meetings with analysts, Stagecoach Group plc is  providing a trading update for its financial year ending 27 April 2019. They have seen further strong trading and positive progress in the UK Rail Division, resulting in an increase in their expectations for adjusted earnings per share from when they announced their interim results in December 2018.   

Revenue growth

Like-for-like revenue growth for the financial year to date in each of the Group's main businesses is:

UK Bus (regional operations)                                             - forty four weeks ended 2 March 2019                      3.4%

UK Bus (London)                                                                  - forty four weeks ended 2 March 2019                      1.3%

North America                                                                     - ten months ended 28 February 2019             (1.4)%

UK Rail (excluding Virgin Trains East Coast)                   - forty four weeks ended 2 March 2019                      1.4%

Virgin Rail Group                                                                  - forty four weeks ended 2 March 2019                      6.7%

UK Bus (London)

They have undertaken a detailed review to identify opportunities to improve their performance on tenders for Transport for London contracts. The bidding environment remains highly competitive and this will continue to exert pressure on the profitability of their UK Bus (London) Division. However, their priority remains securing contracts at a sustainable level where the financial returns reflect the capital invested.

North America

The like-for-like revenue decline of 1.4% for the Division includes 1.9% decline for megabus.com North America. Trading at the other businesses in North America remains in line with their expectations. As previously reported, they expect the disposal of the North America Division to complete before the financial year end.

UK Rail and Virgin Rail Group

The financial performance of their rail businesses is ahead of expectations, with continued good underlying revenue trends. They have continued to make progress in achieving favourable outcomes from concluding industry charges and contractual matters associated with the expired South West Trains franchise, resulting in additional profit being recognised in the current financial year. 

Preliminary results

The next planned update is the announcement of the Group’s preliminary results on Wednesday 26 June 2019.

Revenue growth reporting

They currently provide two scheduled trading statements each year in addition to two results announcements. The trading statements provide like-for-like revenue growth percentages for each division. While they plan to continue making two trading statements each year, they will stop systematically providing formulaic revenue growth figures in those statements. They feel that the provision of such data four times a year puts too much focus on short-term factors, and distracts from an assessment of the longer term prospects of the Group.