Stagecoach to order 580 vehicles
"We are committed to reinvesting our profits in making further improvements to our quality of service to passengers so they share in our success," says Les Warneford, managing director of Stagecoach UK Bus. "Buses are a key part of the solution to the growing problem of traffic congestion in our towns and cities, and we believe there is a huge opportunity to attract more and more people out of their cars and on to public transport in the future."
The order will be the largest ever placed by Stagecoach and the announcement coincides with the group's interim results for the six months ending October 2007 which showed an increase in operating margins for the UK Bus division from 10 per cent last year to 14.6 per cent in 2007. Revenue for UK Bus was up 8.1 per cent to £367.1million (2006: £339.6million) with operating profit of £52.5million (2006: £34.1million).
Stagecoach says that it is continuing to achieve organic growth in the UK Bus Division, with passenger volumes up 3.9 per cent on the same period last year, and an estimate of 2.4 per cent after allowing for concessionary travel scheme-induced growth.
Stagecoach's last major order for buses was in February 2007 when it ordered 444 vehicles with Alexander Dennis and MAN the main beneficiaries. It also ordered 100 Optare buses the previous November, including 25 of the new Versas, the first of which have recently gone into operation.
In North America, Stagecoach's bus operations, excluding megabus.com, earned $36.2million (£18million) - 2006: $32.2million (£17.2million) - resulting in an operating margin of 14.0 per cent, on revenue up 3.0 per cent at $258.9million (£128.6million) - 2006: $251.3million (£134.5million).
North American megabus.com operations reported revenue of $4.8million (£2.2million) - 2006: $2.2million (2006: £1.2million) for the six months and an operating loss of $2.2million (£1.1million) - 2006: $1.0million (£0.5million). The US megabus.com operation runs to 20 cities in the mid-west and west of the United States and has carried more than 630,000 passengers to date.
Stagecoach Group chief executive Brian Souter appears to have become more relaxed about the potential impact of the government's road transport bill, according to his statement accompany the results. "We believe the bus can be at the heart of initiatives to tackle climate change," says Souter. "Stagecoach is well placed to benefit from measures to address road congestion and we have already held detailed discussions with our partner transport authorities in Manchester and Cambridge on how we can play a part in the delivery of successful road user charging schemes that promote intelligent car use."
Meanwhile the enforced divestment of services following the Competition Commission ruling on the joint venture with Comfort DelGro's Scottish Citylink is progressing: "We have now reached a provisional agreement that will involve a proportion of our services on the Saltire Cross network being sold to another bus operator," says Souter. "We expect the final agreement, which requires approval by the Competition Commission,to be completed in early 2008."
Stagecoach's share of the Scottish Citylink operating profit was £0.6million for the six months to 31 October 2007 (2006: £0.5million).