Public transport giant Stagecoach is pondering the sale of its extensive American operations which it first invested in back in the late 1990s.
The move comes as the group announced a £500 million drop in half-yearly turnover after losing the South West Trains franchise, which ended in August 2017. I
Half yearly revenue for the period was £1,230.8 million (H1 2018 restated: £1,794.0 million), which is lower than the prior year period due to losing the franchise and also the East Coast franchise, which ended in June 2018. The North American division saw revenues fall 3.2%, while earnings fell to $21.2 million from $27.6 million.
Total operating profit, before exceptional items, reduced to £103.4 million (H1 2018: £114.8m) with the reduction reflecting the strong prior year contribution from the now expired South West Trains franchise.
Coach USA is one of the largest transportation operators in North America. It operates more than 2,400 buses and coaches and employ more than 5,200 people. The North America business is headed by chief operating officer Linda Burtwistle. It provide critical local and inter-city transport services for communities throughout the US and Canada. Coach USA owns more than 25 bus carriers in North America that operate scheduled bus routes, motor coach tours and charters.
However, the company has highlighted its continuing innovation with the trial of autonomous buses carrying passengers between Edinburgh and Fife, in a £4.35 million Innovate UK funding initiative.
Stagecoach is now second largest ‘contactless transit merchant’ in Europe, after Transport for London.
Chief executive Martin Griffiths said: “I am pleased to report positive half-year financial results, ahead of expectations. Our strategy is designed to grow our core business, to support innovation, and to position the Group to benefit from future opportunities’’
“We have delivered encouraging results at our UK regional bus business, where we continue to deliver high customer satisfaction.
“Targeted fleet and technology investment is helping to enhance operational delivery and improve cost efficiency. We continue to innovate across a range of areas including autonomous buses, contactless payment, data analytics and demand responsive transport. We are well positioned in UK rail, with three live contract bids and more than 20 years’ experience of delivering innovation and investment for customers,” he said.
Mr Griffiths said he welcomed the UK Government’s rail review as an opportunity to deliver better value and day-to-day performance for passengers, a partnership structure and contracting system which is sustainable for the long-term, and reform of outdated regulations which are holding back customer-focused improvements.
“While we recognise the competitive challenges in some of our markets in the UK and North America, we are confident that public transport will be central to delivering Government priorities to grow the economy, connect people and communities, reduce road congestion and improve air quality.
“We are reviewing strategic options for the North America Division and that includes ongoing discussions regarding a possible sale of all or part of the business. “The Group is focused on making further progress in the second half of the year and we have increased our expectation of full-year adjusted earnings per share to reflect the above-forecast rail earnings in the first half of the year.”
Stagecoach is one of the UK’s biggest bus and coach operators with over 8,000 buses and coaches on a network stretching from south-west England to the Highlands and Islands of Scotland. Low-cost coach service, megabus.com , operates a network of inter-city services across the UK. Stagecoach is a major UK rail operator, running the East Midlands Trains network.