PERTH-based transport business Stagecoach saw £30.9 million added to its market value yesterday after it reported “strong trading and positive progress” in its UK rail division.

Shares in the business, which was founded by Brian Soutar in 1980, received an 11 per cent bump in early morning trading before closing 3% up at 160.2p at the end of the day.

That brought the market capitalisation of the FTSE 250 business to £917.6m, up from £886.7m at the previous day’s close.

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It comes after the business, which is in the process of selling its US division, announced that thanks to the performance of its UK rail arm it was increasing its expectations for adjusted earnings per share for the year to the end of April.

“The financial performance of our rail businesses is ahead of our expectations, with continued good underlying revenue trends,” it said in an announcement to the stock exchange.

“We have continued to make progress in achieving favourable outcomes from concluding industry charges and contractual matters associated with the expired South West Trains franchise, resulting in additional profit being recognised in the current financial year.

In December the firm announced that turnover in its UK rail business had fallen from £899.2m to £335.1m in the first half as a result of it losing both the South West Trains and Virgin Trains East Coast franchises.

The operation of the East Coast line was nationalised last May while the South West franchise passed from Stagecoach to First Group and MTR in August 2017. Stagecoach continues to run the East Midlands Trains network and holds a 49% shareholding in Virgin Rail Group, which operates the West Coast main line.

In its trading statement the company said that in the 44 weeks to the start of March Virgin Rail Group saw revenues rise by 6.7% while the remainder of the rail business saw a 1.4% rise.

READ MORE: Stagecoach sells US arm after fall in profits

Stagecoach is currently bidding to take over the Southeastern, East Midlands and West Coast Partnership networks, with the results of those tenders expected at some point this year. It is thought the announcement of all three has been held up due to wrangling over pensions, with Stagecoach and some of its rival bidders understood to have refused to take on associated pension liabilities.

Elsewhere, Stagecoach said the sale of its North American business, which was announced in December, is moving ahead as planned and should close by the end of this month. US private equity firm Variant Equity Advisors agreed to buy the division via its Project Kenwood Acquisition vehicle, with Stagecoach expected to use the proceeds of the $271m sale to pay down debt.

Stagecoach, which originally entered the US market via the £1.2 billion acquisition of Coach USA in 1999, put the loss-making business up for sale after being forced to write down its value by £85m last year. In the 10 months to the end of February US revenues declined by 1.4%, including a 1.9% decline for Megabus North America.

This is the second time the business has chosen to exit the US, with the bulk of the Coach USA assets being sold to private equity firm Kohlberg & Company in 2003 after suffering millions of pounds of losses. Having launched Megabus in the US in 2006, Stagecoach went on to buy back much of the business it sold to Kohlberg – Coach America - in a £101m deal sealed in May 2012.

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Revenues in Stagecoach’s UK regional bus arm rose by 3.4% in the 44 weeks to the start of March, while in London, where it is seeking to win a greater number of Transport for London contracts, they were up by 1.3%.

“The bidding environment remains highly competitive and this will continue to exert pressure on the profitability of our UK Bus (London) Division,” it said. “However, our priority remains securing contracts at a sustainable level where the financial returns reflect the capital invested.”