Growth in US and European operations predicted will offset slight decline in UK growth
Transport giant Stagecoach is predicting profits in the coming year will remain in line with last year despite a slight decline in growth in the UK market.
The Perth-based operator's rail division, which includes South West Trains and East Midlands Trains, saw like-for-like sales rise 8.8 per cent in the 48 weeks to April 1, down from 9.5 per cent for the previous 40 weeks.
Its bus division, which runs a fleet of 8,100 vehicles across more than 100 towns and cities, including recently-launched budget Megabus services from London to continental Europe, saw like-for-like sales grow by 2.7 per cent, down slightly on three per cent in the previous 40 weeks.
However the group said it is confident in maintaining overall trading and profitability levels and its wholly-owned divisions were well placed to at least maintain their operating profit in the year to the end of April 2013.
Sales across its North America business were up 14 per cent, boosted by its Megabus network, and up from 13.3 per cent in the previous 40 weeks.
Stagecoach recently launched Megabus services between London and Paris, Amsterdam and Brussels and said the new service has so far proved popular.
Virgin Rail Group, which operates the West Coast Main Line franchise and is 49 per cent owned by Stagecoach, saw sales growth of 7.9 per cent, down from 9.3 per cent in the first 26 weeks of its financial year.
Stagecoach posted strong growth figures earlier in the year, though comparable against trading through what were extreme weather conditions the previous year.
Rival FirstGroup, the UK's biggest bus operator, issued a profit warning last month due to a drop in margins at its bus division largely as a result of cuts in government subsidies.
John Lawson, an analyst at Investec, said most Stagecoach divisions were trading relatively well and management was "on top of its game", adding the further slowdown at Virgin was "the only slightly disappointing theme".
The West Coast Main Line franchise is up for renewal in the summer and Virgin is facing stiff competition from a number of other operators.
Investec expects Stagecoach to make pre-tax profits of £193.2 million for the year to the end of April 2012, down six per cent on the previous year, but added it may revise its forecast to closer to £200 million.