SCOTTISH transport company Stagecoach has highlighted its ambitions in the long-distance coach market in mainland Europe as it pursues opportunities arising from deregulation.
The Perth-based bus and rail company, which launched megabus.com services in the fast-growing domestic German market at the start of this month, yesterday declared it was progressing plans to launch services within Italy.
It is also working on plans for a Cologne-Lyon-Barcelona service.
Stagecoach said: "We have been encouraged by the progress of megabus.com in mainland Europe, and we remain excited about its future prospects."
A company spokesman said: "Mainland Europe is a significant focus for us in the next few months."
He noted Italy, Germany and France had a combined population of about 212 million, declaring: "There is a significant potential market there."
The spokesman described megabus.com as a "single powerful brand" in Europe.
Stagecoach said that, as it continued to expand this "promising business", it anticipated operating losses from megabus.com in Europe to increase from about £5 million in the 12 months to April 30, 2015, to £10m in the following financial year.
Stagecoach already runs megabus.com services which connect the UK, France, Spain, Germany, Belgium, Luxembourg, and the Netherlands.
The company declared it was not planning any significant expansion of its megabus.com operations in North America, a market in which a significant drop in fuel prices has resulted in a marked slowing of revenue growth as people make more journeys by car.
Stagecoach said it would "reassess the further growth opportunities" for its North American megabus.com operations during the second half of its next financial year to April 30, 2016.
The company told the stock market it was pleased that a settlement had now been agreed in principle with the US Department of Justice and the New York Attorney General's office in respect of the previously reported anti-trust litigation relating to the group's joint venture, Twin America.
Stagecoach said it anticipated its share of the additional costs associated with this settlement would not exceed £3m and added that these would be recorded as exceptional items in the second half of the year to April 30, 2015.
It said that revenues in its UK rail division, which takes in South West Trains and East Midlands Trains, were up nine per cent on a year earlier on a like-for-like basis during the 48 weeks to March 29.
Stagecoach added that it was pleased so far with progress with its new Virgin Trains East Coast rail franchise, in which it has a 90 per cent stake.
It put year-on-year, like-for-like revenue growth in its UK bus operations, outside London, at 2.4 per cent in the 48 weeks to March 29. Revenue growth on this basis in its Virgin Rail Group joint venture, which runs West Coast Main Line services, was 7.6 per cent.
Stagecoach said that revenues in its North American operations in the 11 months to March 31 were up one per cent on the same period a year earlier.
It declared that, overall, recent trading had been consistent with its expectations.
The City is forecasting Stagecoach will make underlying pre-tax profits of £183m in the year to April 30, 2015, up from £180.7m in the prior 12 months.
Shares in Stagecoach dipped 1.5p to 365p in a weaker stock market.
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