Stagecoach’s shares have plunged after the bus and rail operator said its business is being hit because people have been fewer trips to big cities in the UK and Europe since the Paris attacks.
Reporting first-half results, the company said discretionary journeys to London, Paris and Brussels had fallen significantly since the terrorist attacks on 13 November. Its British business had also been badly affected by the recent floods, and the company said it had made a modest reduction to its expectations for full-year earnings, without giving details.
Martin Griffiths, chief executive of Stagecoach, said: “There has undoubtedly been an impact from the terrible events in Paris. It’s starting to come back but we need to be cautious about the rest of the year. It’s mainly London [in the UK] and we have an intercity coach business in continental Europe which mainly serves big capital cities.”
In its East Midlands Trains business, revenue rose by about 8% in the two months before the attacks but growth disappeared in the two weeks after. Business at the service, which runs trains from Leicester, Derby and other east Midlands cities to London St Pancras, is starting to pick up again, Griffiths said.
Thomas Cook and easyJet have reported a fall in flight bookings in and out of France after the Paris attacks, but Stagecoach has now reported travel affected within the UK. Like Griffiths, the bosses of Thomas Cook and easyJet said they believed business would pick up again as fears receded.
Pre-tax profit excluding exceptional items for the six months to the end of October rose 12% to £121.5m and the interim dividend increased 9.4% to 3.5p. Statutory pre-tax profit fell to £90.8m from £98.3m.
Stagecoach’s shares fell as much as 15% and were down 14% at 305.8p at 9.30am as investors reacted to the impact of the Paris attacks and various other pressures on its operations.
Griffiths said Stagecoach’s bus service in Cumbria and the north-west of England, which makes £40m a year in revenues, was “under water” and that its business in Scotland had also been affected by the recent floods. Scottish operations have also been hit by the closure of the Forth road bridge, he added.
In the UK, bus services had been affected by congestion in cities such as Manchester and Oxford and long-distance bus revenues were reduced as car use rose following the fall in the oil price.
In the US, long distance bus revenues felt a greater impact from reduced petrol prices and the strong dollar has deterred tourists from Europe, creating competition on bus routes from airports and to out-of-town discount outlets used by shoppers visiting the US.
