Transport giant says West Coast rail deal close
Transport giant Stagecoach today said its Virgin Rail joint venture was close to reaching an agreement to keep running the West Coast franchise when the current deal ends this weekend.
The update came as the Perth-based group reported a 29 per cent rise in first-half profits and described the outlook for the rest of the year was positive.
The UK government initially awarded the West Coast franchise to rival FirstGroup, but backtracked after flaws were found in the bidding process.
Stagecoach, which has a 49 per cent stake in Virgin Rail, said it was close to reaching an agreement to continue operating the West Coast train services beyond the end of the current franchise on 8 December “which will ensure continuity for passengers and employees”.
It plans to make a new bid when the route comes up for tender again. Chief executive Sir Brian Souter said: “We are playing an active part in the UK government’s review into rail franchising.
“The private sector has been central to the huge growth of UK rail travel over the past 15 years and it is important that a sustainable rail franchising programme is restarted as quickly as possible.”
Stagecoach posted a pre-tax profit of £123.7 million for the six months to 31 October, up from £88.7 million a year ago, on total revenues 8.5 per cent higher at £1.4 billion.
Revenues at Stagecoach’s regional bus operations across the UK rose 8.3 per cent to £488.3m.
In North America revenues rose by almost 20 per cent and the group said it was pleased with the performance of the businesses acquired in the summer from Coach America. Its budget megabus.com coach brand was now serving around 120 locations across Canada and the US.
“We see good potential ahead to grow our transport operations in the UK and North America, and we believe the outlook is positive,” said Sir Brian.