- Stagecoach reported half-year turnover rose 15.5% to £773.2m
- The transport company's turnover was driven by its regional UK bus division
Stagecoach Group's first half turnover increased by more than £100m thanks to the continued recovery in coach travel.
The Scottish transport company's revenues rose 15.5 per cent from £669.6 million to £773.2 million in the six months ended October 28.
Sales growth was driven by the regional UK bus division benefiting from several government-backed initiatives, including the £2 fare cap in England and free travel for under-22s in Scotland.
Growth: Stagecoach Group's first half turnover increased by more than £100m
The UK government introduced the £2 limit in January to help Britons struggling with the cost of living crisis, and extended the measure until December next year.
Stagecoach also attributed the performance to 'selectively increased' rate increases to offset higher staff costs and the switch of some activities from commercial to tender services.
But the Perth-based group acknowledged that its London bus business had “disappointing” financial performance, with the segment's operating losses almost quadrupling from £1.5 million to £5.8 million.
The company blamed the result on roadworks and traffic congestion in the British capital, as well as staff shortages and salary pressure.
As a result, Stagecoach's adjusted operating losses fell to £43.3m, although statutory pre-tax profits almost doubled from £24.6m to £47.6m.
The company expects profits from its London bus division to improve in the second half of the financial year as it battles recruitment issues and receives 'delayed inflationary increases' in contract revenues.
Despite high economic uncertainty, the country has not changed its outlook for the whole year.
“As we transition to a post-pandemic world, we are focused on further returning to profitability and adapting our services to new and emerging travel patterns,” Stagecoach told investors.
“We have worked closely with local and national government to maintain bus services during the pandemic and recovery.”
Founded in 1980 by Sir Brian Souter and his sister Dame Ann Gloag, Stagecoach operates around 8,300 buses, coaches and trams in the UK, including the Sheffield Supertram service and the Oxford Tube coach brand.
Two years ago, Stagecoach began talks about a merger with National Express, which would have created a fleet of more than 36,000 vehicles and control of around 30 percent of the British bus market.
However, the group accepted a competing £595m takeover from German investment giant DWS, saying the 'superior' offer provided greater certainty for staff and investors.