In a regulatory news announcement to the London Stock Exchange, the company said: “Trading conditions across the group, and at our rail businesses in particular, remain challenging.”
However, the trading statement made no reference to the National Express debacle, except perhaps obliquely in its remark that the company’s “financial position remains strong and we have significant committed, undrawn bank facilities”.
Earlier this week, in an unprecedented public announcement, National Express was lambasted by Spain’s Cosmen family, the group’s biggest shareholder, for walking away from merger talks with Stagecoach.
The family, which owns 18.5% of National Express, said it had serious concerns over the group’s lack of a “well-defined strategy”.
National Express is a major school bus operator in North America, the biggest bus operator in Spain and holder of three rail franchises in the UK, but it became a takeover target after it was forced to return the east coast rail franchise earlier this year as it struggled with £977m of debt.
Meanwhile, Stagecoach last week said it was “very disappointed” after National Express severed the last-gasp merger talks in favour of an anticipated £350m rights issue to help pay down its debt mountain.
Stagecoach had been proposing a £1.7bn all-share merger with National Express in a deal that would leave its shareholders with a majority 60% stake in a merged business.
In the latest twist, Jorge Cosmen, the company’s deputy chairman, was earlier this week reportedly still trying to muster investor support to force National Express to reopen talk with its Scottish rival.
At same time, other shareholders are now calling for Jorge Cosmen’s resignation.
In its trading statement, Stagecoach yesterday also said that revenue growth “remains below the growth rates observed in recent years”.
The group, which like its rivals is facing problems including a fall in commuter numbers as unemployment rises, had warned previously of slowing revenue growth.
Nonetheless, Stagecoach insisted that the overall profitability of the group since the end of April was in line with management’s expectations.
It said: “Our bus businesses, while not immune to changes in economic conditions, benefit from a robust and flexible business model and are well positioned
to trade through the economic cycle.”
In the 24 weeks to October 18, like-for-like revenue in Stagecoach’s UK bus operations climbed 4.3% while its rail division had growth of 1.7%.
Revenue at Virgin Rail, in which Stagecoach holds a 49% stake, jumped 6.9%.
In its North American unit, which includes megabus.com, revenue declined 6.8% for the five months to the end of September.
Shares in Stagecoach yesterday fell 2% to 140.3p.