STAGECOACH has posted a strong trading update as well as announcing new banking facilities of £535 million and an intention to invest more than £20m expanding its Megabus network in Europe.
The transport group said like-for-like revenue in its regional UK bus network was running 3.2 per cent ahead in the 24 weeks to October 12, excluding revenue earned from the Commonwealth Games in Glasgow. It said passenger volumes had also risen.
London bus revenue was up 14.5 per cent in spite of traffic disruption from ongoing road works, while UK rail revenue grew 7.4 per cent, which Stagecoach said was in line with its expectations.
The company runs the West Coast Main Line with Virgin and also has rail interests in the south west and midlands in England. A joint venture with Virgin is among the shortlisted bids for the East Coast franchise, which is due to return to private operation next year.
Revenues from Virgin Rail Group in the period were 5.8 per cent up, following the start of the new West Coast contract in June this year. Stagecoach said: "Trading to date under the new franchise has been strong."
In North America, revenue for the five months to September 30 grew 3.5 per cent, helped by the growth of Megabus. Trading at the New York sightseeing bus tour joint venture Twin America remains "challenging".
Stagecoach outlined plans to grow its Megabus operations in continental Europe, with further services to be introduced in the current financial year, which comes to a close at the end of April.
At the moment Megabus has routes in Germany, Spain, France, the Netherlands and Belgium.
Yesterday Stagecoach said: "We have been pleased with the progress of our megabus.com inter-city coach operations in continental Europe and we are now planning to extend the network further.
"This is an exciting prospect for the medium-term but will result in a few million pounds of new start-up losses in the year ending 30 April 2015 and around £20m of additional capital expenditure, primarily in acquiring new vehicles."
The new £535m banking facilities, signed with a consortium of banks, run until 2019 with an option for an extension of up to two years.
The agreement replaces facilities which were due to expire in February 2016. Analysts from Investec said: "Stagecoach delivered another consistent and encouraging message."
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