Fares, rail policy and DfT news

28.06.18

Stagecoach hit by £85.6m loss after being stripped of East Coast franchise

Stagecoach has revealed a loss of £85.6m after being stripped of the East Coast franchise, which was recently brought under government control.

The DfT is now running the franchise as London North Eastern Railway (LNER).

The revealed loss came as Stagecoach – who owned 90% of the franchise – released its annual results, which also showed revenue fell from £3.9bn to £3.2bn in the year to 28 April.

The Perth based company’s operating profits for UK rail fell by 12.6% to just £24.9m.

Stagecoach said on Thursday that there have been “lessons learnt,” although the losses were “significantly influenced by factors” outside its control.  

"We have examined our bid for and operation of the franchise closely and have also looked more broadly at our rail bid governance,” Stagecoach continued.

"We involved external advisors in that and we have made changes to our processes to strengthen our approach to bidding and contract management in UK rail.”

Chief executive Martin Griffiths said: "I am disappointed to be reporting significant exceptional costs in respect of Virgin Trains East Coast but I am pleased that there is now clarity for both customers and shareholders.

"We have made significant progress elsewhere in our rail portfolio and continue to see value and opportunities.”

 

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