Rail franchises operators & contracts

07.12.16

Stagecoach reports half-year profit dip due to ‘subdued’ ECML passenger travel

Stagecoach has reported that it continues to expect a slight dip in its earnings this financial year, saying that improving demand for rail travel might help counter-balance its falling bus revenues.

The transport company’s revenue for May to October edged up from £1.97bn to £2bn, while pre-tax profits nudged down slightly from £91m to £89.5m.

Stagecoach put the decline down to “subdued” revenue trends and specific concerns over passenger numbers travelling on its East Coast franchise, although its South West Trains franchise offering London commuter rail services has been extended until at least August 2017.

Chief executive of Stagecoach Martin Griffiths highlighted the company’s growth strategy of focusing on customer satisfaction, saying: “There is a large market opportunity for modal shift from cars to public transport against a backdrop of population growth, urbanisation, technological advancements and an increase in pressure to tackle road congestion and improve air quality.”

Stagecoach welcomed transport secretary Chris Grayling’s announcement on planned changes to train contracts after its revenues were in part affected by Network Rail maintenance works.

Griffiths said that the proposals for TOCs to begin sharing responsibility with Network Rail for maintaining tracks would make the company’s management more accountable for rail delays and better equipped to resolve issues.

“If we can actually see this now happen and build on it positively and make the words become real action then I endorse it absolutely,” he commented.

Stagecoach’s forecast expects revenue growth in the second half of the year, predicting that a recovery in rail passenger numbers, helped by changes to pricing and higher marketing on its East Coast routes to Scotland, will eventually make up for lower demand for bus journeys.

Economic weakness has reduced bus travel in the north of the country while the lower price of fuel has encouraged more people to drive, its report explained, but it expects the East Coast line to be profitable throughout its contract, due to expire in 2023.

 Have you got a story to tell? Would you like to become an RTM columnist? If so, click here.

Comments

Richard   08/12/2016 at 16:43

Fortunes on East Coast may improve if Stagecoach ditched the Virgin brand, which to many suggests extortionate pricing and lots of talk with little reality! I have never understood the smoke and mirrors surrounding the quality of the Virgin brand name, nor why Stagecoach with 90% of the Franchise bother to brand it this way?

Andrew Gwilt   08/12/2016 at 20:46

Stagecoach are still going to lose the South Western Franchise despite ordering 30 5-car Class 707's next year.

Add your comment

 

rail technology magazine tv

more videos >

latest rail news

RAIB: Croydon tram driver had ‘lost awareness’ before fatal derailment

20/02/2017RAIB: Croydon tram driver had ‘lost awareness’ before fatal derailment

The driver of the fatal Sandilands junction tram accident in Croydon, London, had “lost awareness” before the carriage he was control... more >
HS3 success key to closing bleak north-south divide, says IPPR

20/02/2017HS3 success key to closing bleak north-south divide, says IPPR

Success with HS3 is key to readdressing the imbalance in investment between the north and London, influential think tank IPPR North has argued. ... more >
ORR confirms Joanna Whittington as CEO

20/02/2017ORR confirms Joanna Whittington as CEO

The Office of Rail and Road (ORR) has today officially confirmed the appointment of Joanna Whittington as its permanent CEO following an open pub... more >

editor's comment

17/01/2017Rising to the digital demand

The countdown is well and truly on for this year’s UK Rail Industry Awards (UKRIA), and the whole RTM team is looking forward to welcoming you to the fourth edition of this event on 9 February.  Held once again at Battersea Evolution, the prestigious awards ceremony promises to be an extraordinary evening, celebrating some of the major achievements of the industry in the last year. You can see the awards shortlist on pag... read more >

last word

Making rail fares simpler

Making rail fares simpler

David Sidebottom, passenger director at Transport Focus, explains how a number of initiatives over the next 12 months aim to make rail fares simpler. By the end of 2017, we hope passengers w... more > more last word articles >

'the sleepers' daily blog

Southern Rail passengers reminded to claim compensation

03/02/2017Southern Rail passengers reminded to claim compensation

Southern’s annual season ticket holders have been reminded that they are entitled to claim compensation due to the franchise’s poor performance over the 2016-17 financial year. Last year, the DfT promised that Southern season ticket holders would be able to claim the equivalent of a month’s worth of fares in compensation... more >
read more blog posts from 'the sleeper' >

comment

The role of simulation in ERTMS training and system design

01/02/2017The role of simulation in ERTMS training and system design

Paul Boyle, head of ERTMS at Virgin Trains East Coast (VTEC), discusses the role of simulation in ERTMS training ahead of this year’s &lsqu... more >
Digital railway maintenance

01/02/2017Digital railway maintenance

Tim Flower, head of maintenance at Network Rail, explains how the infrastructure owner is adopting a new approach for condition monitoring to max... more >
Challenges and opportunities for big data in the Digital Railway

01/02/2017Challenges and opportunities for big data in the Digital Railway

Dr John Easton and Dr Shruti Kohli from the University of Birmingham write for RTM about the role big data can play in transforming the country&r... more >
A better railway depends on harnessing technology

27/01/2017A better railway depends on harnessing technology

Paul Plummer, chief executive of the Rail Delivery Group (RDG), argues that we must change the status quo and invest in technology if we are to c... more >

rail industry focus

View all News

interviews

Tackling regulation at its routes

24/01/2017Tackling regulation at its routes

John Larkinson, the ORR’s director of railway markets and economics, speaks to RTM about the move to regulating Network Rail at a route lev... more >