Stagecoach Group’s first-half turnove jumped by more than £100million thanks to the continued rebound in bus journeys.
The Scottish transport company’s revenues increased by 15.5 per cent from £669.6million to £773.2million in the six months ending 28 October.
Sales growth was driven by its regional UK bus division benefiting from various Government-backed initiatives, including the £2 fare cap scheme in England and the free travel for under-22s in Scotland.
Growth: Stagecoach Group’s first-half turnover has jumped by more than £100million
The UK Government introduced the £2 cap in January to help Britons struggling with the cost-of-living crisis and has extended the measure until December next year.
Stagecoach also credited the performance to ‘selectively increased’ fare hikes to offset higher staff costs and the conversion of some operations from commercial to tendered services.
But the Perth-based group acknowledged its London bus business had a ‘disappointing’ financial performance, with the segment’s operating losses nearly quadrupling from £1.5million to £5.8million.
It blamed the result on roadworks and traffic congestion in the UK capital, as well as employee shortages and salary pressures.
Consequently, Stagecoach’s adjusted operating losses dipped to £43.3million, although statutory pre-tax profits almost doubled from £24.6million to £47.6million.
The company expects profits at its London bus arm to improve in the second half of the financial year as it combats recruitment issues and receives ‘lagged inflationary increases’ in contract revenues.
Despite the significant economic uncertainty, it has not altered its full-year outlook.
‘As we transition towards a post-pandemic world, we are focused on further rebuilding profitability and adapting our services to meet new and emerging travel patterns,’ Stagecoach told investors.
‘We have worked closely with local and national government in maintaining bus services through the pandemic and into recovery.’
Founded by Sir Brian Souter and his sister Dame Ann Gloag in 1980, Stagecoach operates approximately 8,300 buses, coaches and trams across the UK, including the Sheffield Supertram service and Oxford Tube coach brand.
Two years ago, Stagecoach entered talks about a merger with National Express, which would have created a fleet of over 36,000 vehicles and control of around 30 per cent of the UK’s bus market.
However, the group accepted a rival £595million takeover from German investment giant DWS, saying the ‘superior’ bid offered greater certainty for staff and investors.
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