Perth-based transport group Stagecoach expects to complete of the sale of its North American business by the end of the month as it reports a 1.4% drop in revenues, and a 1.9% decline for megabus.com in the US and Canada.
The company is selling the operations to US-based private equity group Variant Equity Advisors in a deal worth $215 million. The proceeds will help reduce the bus and rail firm's net debt which totalled more than £460 million in October 2018.
Stagecoach appoints new east boss after death of managing director
On the rail side, revenue from Virgin Rail Group, for the 44 weeks until the end of March, was up 6.7% and ahead of expectations with continued good underlying revenue trends.
“We have continued to make progress in achieving favourable outcomes from concluding industry charges and contractual matters associated with the expired South West Trains franchise, resulting in additional profit being recognised in the current financial year,’’ said the update.
Meantime, the UK Bus operations, outside of London, saw revenue growth of 3.4%,
It added: “Revenue growth is similar to that reported in the first half of the year, with tender revenue continuing to grow as we increase our market share in that area of business."
Like-for-like vehicle miles operated were 0.5% lower than in the previous year. Like-for-like revenue per vehicle mile grew 4.0% and like-for-like revenue per journey also increased 3.6%.
McGill's bus company spends £4.75 million on low-emission fleet
In London, Stagecoach is undertaking a review to identify opportunities to improve its performance on tenders for Transport for London contracts.
The statement said: “The bidding environment remains highly competitive and this will continue to exert pressure on the profitability of our UK Bus (London) Division. However, our priority remains securing contracts at a sustainable level where the financial returns reflect the capital invested."
