High fuel costs drive Stagecoach's upturn

Aug 29 2008 By Greig Cameron

Travellers turn to public transport in struggle to meet petrol bills

Profits at Stagecoach were higher than expected since May because more people are taking the bus.

The company said high petrol costs are driving customers on to public transport which is helping compensate for its own higher fuel bill.

The UK bus division had a 4.9 per cent increase in passenger numbers for the 16 weeks to August 17, which led to a 9.3 per cent improvement in like-for-like revenue.

In an interim management statement, the company said: "The UK Bus Division continues to trade strongly with the cost pressures from increased fuel prices and higher UK inflation being more than compensated for by continued strong revenue growth.

"People are continuing to switch from travelling by other modes of transport to travelling by bus."

Uk Rail saw a nine per cent jump in revenue though South Western Trains was affected by engineering work, changes in fares, timing of introduction of revenue protection measures and reduced employment in central London.

The company said: "In the UK Rail Division, we continue to see strong like-for-like revenue growth and we are encouraged by this positive trend."

However, turnover at East Midlands Trains, not included in the overall UK rail figures, was 16 per cent higher than under previous owners.

Revenues at the Virgin Rail joint venture were up two per cent and are expected to grow again when work to allow a 30 per cent increase in train services is complete.

Performance in North America was also strong with a 7.6 per cent rise in revenue.

The company said: "We are encouraged by the early performance of the Megabus.com network in the North East of the United States, where we began services on 30 May 2008."

The future for the Perth company continues to look strong. It said: "Whilst we are mindful of macroeconomic developments and continuing cost pressures, the outlook remains positive."

Chief executive Brian Souter is expected to attend the group's AGM today.