Stagecoach/Virgin Rail Doing Well

[LNW-GW Joint]

Stagecoach Group have issued an interim management statement today on recent revenue April-July 2011.

http://www.stagecoachgroup.com/scg/media/press/pr2011/2011-08-19/

On the rail front:
UK Rail (ie SWT, EMT) revenue up 8.4% on same period last year.
VT up 11.1%.
Nothing said about profit.

These sorts of statements are always inscrutable but looks good for the franchises as far as it goes, especially VT.
Stagecoach Group are doing so well they are returning money to shareholders.

 

[WatcherZero]

Well RPI+1% last year was 6% or so revenue rise, plus passenger numbers rising again. Compared to the rest of the economy the Rail industry is steaming out of recession.

 

[All Line Rover]

On the rail front:
UK Rail (ie SWT, EMT) revenue up 8.4% on same period last year.
VT up 11.1%.
Nothing said about profit.

VT's profits are actually down. Significantly! (And this is the case even though they've had record revenues. Virgin claim it is because of increased payments to the government.)

 

[WatcherZero]

It is, Governments making a net profit from them now. £110m last year.

 

[LNW-GW Joint]

VT's profits are actually down. Significantly! (And this is the case even though they've had record revenues. Virgin claim it is because of increased payments to the government.)

Where do you get that from?
The June Stagecoach results show VRG profits are UP from £50M (2009/10) to £80M (2010/11) before tax.

http://www.stagecoachgroup.com/scg/media/press/pr2011/2011-06-29/2011-06-29.pdf

(You have to click on the "full announcemnent" link at the end to find the VRG figures)

 

[bengolding]

Any update as to whether Virgin will continue running the franchise from April 2011 to Dec 2011/Jan 2012 when the new ICWC franchise starts? Last I hears was talks were ongoing with DaFT but no updates.

 

[LNW-GW Joint]

If you read the announcement it says discussions on the extension are ongoing but they (Stagecoach) are "confident" of a successful conclusion.
You wouldn't think it would be too hard, but I guess the Pendolino lengthening project complicates things.

 

[WatcherZero]

Their being very careful, they know the Dft could walk away if they push too hard.

Stagecoach is returning £310m to shareholders, did similar last year so obviously growth and acquisitions arent on their agenda at all.

 

[dk1]

Stagecoach is returning £310m to shareholders, did similar last year so obviously growth and acquisitions arent on their agenda at all.

Good news. At least one of my investments is doing sort of ok at the moment

 

[WatcherZero]

I fear they really need to keep growing or they will be picked off by a larger foreign competitor like Arriva was.

 

[All Line Rover]

Where do you get that from?
The June Stagecoach results show VRG profits are UP from £50M (2009/10) to £80M (2010/11) before tax.

http://www.stagecoachgroup.com/scg/media/press/pr2011/2011-06-29/2011-06-29.pdf

(You have to click on the "full announcemnent" link at the end to find the VRG figures)

I am simply quoting from Virgin's press release (http://mediaroom.virgintrains.co.uk/2011/08/booming-passenger-numbers-drive-record.html), which says that net profit is down 21% to £39.9 million.

 

[tbtc]

Stagecoach is returning £310m to shareholders, did similar last year so obviously growth and acquisitions arent on their agenda at all

Not really much scope to "grow" the bus business much further.

In recent years they have:

• Taken over Yorkshire Traction (including Yorkshire Terrier, Lincolnshire Road Car, Strathtay...)
• Taken over Rapsons
• Moved back into London (by buying back their former business there)
• Expanded Megabus into a real "national" operation (not just a handful of routes into London)

Since rail franchises are controlled by the Government, and any further bus takeovers would attract regulatory interest (after divesting of Preston Bus), I don't really know how they increase the business other than by incremental growth at existing operations (e.g. they've increased the size of the operation here in Sheffield by competing with First).

Handing money back to Shareholders may be about the only thing to do with their money, unless they go crazy and buy some foreign companies (which is the kind of mistake that a few companies have made in the past)...

 

[WatcherZero]

Arriva was doing well with its foreign acquisitions, it became a target because it was doing so well getting continental (French was it?) bus services and DB wanted a piece of the French pie.

 

[gordonthemoron]

Ferrovia Italia may be interested, they took over Arriva Germany

 

[LNW-GW Joint]

I am simply quoting from Virgin's press release (http://mediaroom.virgintrains.co.uk/2011/08/booming-passenger-numbers-drive-record.html), which says that net profit is down 21% to £39.9 million.

I can't make the numbers in the two announcements match at all, even though they are for the same period.

The only reason I can think of for a discrepancy is that the "Virgin Rail Group" numbers reported by Stagecoach might well include "Virgin Rail Projects" (ie the Pendolino lengthening programme) while the "Virgin Trains" numbers (ie just the franchise operation) reported by VT do not.

 

[WatcherZero]

I can't make the numbers in the two announcements match at all, even though they are for the same period.

The only reason I can think of for a discrepancy is that the "Virgin Rail Group" numbers reported by Stagecoach might well include "Virgin Rail Projects" (ie the Pendolino lengthening programme) while the "Virgin Trains" numbers (ie just the franchise operation) reported by VT do not.

Gross vs Net profits.