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Stagecoach says it will bid no more for UK rail franchises


UK transport operator Stagecoach, which has reported a 30 per cent rise in pre-tax profit, has no plans to bid for new UK rail franchises after its operations end in November.

Martin Griffiths, chief executive, said on Wednesday it was “highly unlikely” that Stagecoach would be involved in UK rail again, but would “never say never”.

The travel group said on Wednesday its full-year pre-tax profit rose to £101.2m for the year to the end of April, compared with £77.6m for 2018. The shares fell 0.3 per cent in early trading in London.

Stagecoach faces losing three rail franchises, which include East Midlands and the West coast mainline, which it operates with Virgin. The company’s UK franchises are expected to end in November, and the company said it has no plans to bid for more.

“Stagecoach’s rail division is slipping off the rails following the loss of several high-profile contracts and its exclusion from the tender process for a number of other key routes,” Julie Palmer, a partner at Begbies Traynor, said. “As a result, the transport provider will be pivoting towards coach and bus travel for the foreseeable future.”

Stagecoach was disqualified from three rail franchise competitions by the UK’s Department for Transport because it was unwilling to take on “well in excess of £1bn” of pensions liability. It is currently taking legal action against the department.

“We continue to focus on driving growth at our core high quality bus and coach operations in the UK,” Mr Griffiths said, “but we have no intention to bid for new UK rail franchises on the current risk profile offered by the Department for Transport.”

Annual revenue from continuing operations fell to £1.9bn from £2.9bn, mainly due to its South West and East Coast franchises ending.



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