Stagecoach issues profits warning

[thenorthern]

From BBC News

Stagecoach blames Paris attacks for fall in passengers

Stagecoach has blamed the Paris terror attacks for a slowdown in revenue growth at the transport group.

The rail and bus operator cut its full-year earnings forecast as it said passengers had cut back on trips to big cities since last month's attacks.
The company also said there had been "softer than expected revenue" for several of its regional UK bus businesses.

Shares in Stagecoach closed down 14.4% to 304.7p in response.
However, the fall in the share price was also due to other factors mentioned in the statement released with its half-year results, said Nomura analyst James Hollins.

"The combination of a cautious outlook, withdrawal from the East Anglia rail bidding process and clear indication from management that exceptional shareholder returns should not be expected near-term are likely to drive market concerns," he said.

Chief executive Martin Griffiths admitted that "challenges remain in our sector in the short-term".

Stagecoach said that discretionary travel had been worst hit, with fewer journeys to London on its South West train network outside usual commuter times.

There were also fewer journeys between Oxford and the capital on its regular coach service.

http://www.bbc.co.uk/news/business-35051346

Considering that Stagecoach operate 2 train operators into the capital (East Midlands Trains and South West Trains), majority own another one (Virgin Trains East Coast) and have 49% of another one (Virgin Trains) the company seems to be struggling to take people to the London.

 

[lordbusiness]

Overexpanded and found the sums don't add up?

Would possibly explain the Anglia pull out if they either:
a. Don't have the money in the bank to cover the anglia commitment and give the shareholders a divi.
b. Realised they weren't going to get much of a return on anglia
c. Both the above.

Would possibly explain the rejection of the South West extension a couple of months ago as well.

One could surmise that all is not well, be interesting to watch the share prices over the next few months.

 

[dk1]

Purchased some more shares whilst they where 13% down yesterday. Could be a bumpy ride.

 

[Tetchytyke]

For the six months to 31 October, revenue rose £430m to £1.97bn, with pre-tax profit up £12.9m to £121.5m.

The interim dividend was raised by 9.4% to 3.5p.

Hmm...

That doesn't sound like a business in turmoil.

 

[BestWestern]

Stagecoach do have a history of trying to do too much of course; the ghost of Coach USA still haunts them. And of course First are still in the grip of their own failed efforts. One might have expected lessons to have been learnt, but then again given the current climate I suppose one can't blame a firm for taking opportunities when they present themselves. Hoping a speedy recovery ensues.

 

[Taunton]

Has anyone actually noticed any downturn in traffic, because I haven't.

Maybe if they tried a bit harder on their Waterloo off-peak services and didn't send out minimal 4-car formations on December Friday evenings with people standing out to Basingstoke etc at the end of a theatre show, as in previous years, people would have been more minded to use their services again.

 

[LNW-GW Joint]

Virgin WC is doing well, 6.1% margin, extension to March 2018 expected.
Page 9 of this: http://www.stagecoach.com/~/media/F...Attachments/media/press/pr2015/2015-12-09.pdf

Virgin Rail Group's West Coast rail franchise continues to perform strongly and that is benefitting taxpayers through profit share payments by the business to the UK Department for Transport. The Department for Transport has indicated that it plans for the current franchise, which commenced in June 2014, to run until 31 March 2018 on the commercial terms already agreed.
The franchise is performing significantly ahead of our expectations at the time the contract was agreed. The franchise agreement includes protections for taxpayers which limit the level of profit that the business can earn and as a result, there is limited scope for further profit growth.

So the "half empty" trains are pulling in the revenue.

 

[HH]

They're a sneaky bunch. Maybe they want to get more shares for their bonuses...

 

[Tetchytyke]

They're a sneaky bunch. Maybe they want to get more shares for their bonuses...

I try my hardest not to be cynical at times like this, and I know the Stagecoach fanbois will just say I'm biased. But I find it remarkable how often Mr Souter extends his shareholding whenever the share price unexpectedly dips, with the dividend magically bouncing back to usual levels within a few months. He's a very canny businessman...

 

[Oliver]

But I find it remarkable how often Mr Souter extends his shareholding whenever the share price unexpectedly dips, with the dividend magically bouncing back to usual levels within a few months.

I have not noticed that; please can you show me the evidence.

 

[thenorthern]

With GNER the 2005 London bombings severely affected their financial performance and was seen as a major factor in their early demise. I am aware that their parent company Sea Containers did have financial issues at the same time as well.

I remember as well Midland Mainline had many £15 Derby to London return offers right after the 2005 London bombings as they were short of passengers.

I just hope though that recent events around the world don't affect Virgin Trains East Coast passengers numbers too much as it would be a shame for another East Coast franchise holder to fail.

 

[BestWestern]

With GNER the 2005 London bombings severely affected their financial performance and was seen as a major factor in their early demise. I am aware that their parent company Sea Containers did have financial issues at the same time as well.

I remember as well Midland Mainline had many £15 Derby to London return offers right after the 2005 London bombings as they were short of passengers.

I just hope though that recent events around the world don't affect Virgin Trains East Coast passengers numbers too much as it would be a shame for another East Coast franchise holder to fail.

I think people are a little more hardened against it now, to be honest. Recent events are viewed by most people I know as merely the latest in a long line of incidents; and I get the distinct impression that most are quite happy to go about their business in the knowledge that the chances of being in the wrong place at the wrong time are very slim.