Stagecoach Results

Stagecoach Holdings, the acquisitive bus and rail group, announced near tripling of pre-tax profits to £120.5million ($201.2m) in a year which marked its transformation from a UK bus operator to a broadly based transport group with increasing overseas interests.

The jump in pre-tax profits from £43.6m reflected acquisitions made during the year and also included a £15.2m gain on the disposal of Strathclyde buses, a move forced on Stagecoach by the competition authorities and a £1.9m from sales of property.

SWT increased its contribution to Stagecoach's operating profits from £400,000 to £7.7m in the year on turnover which rose from £48.8m to £224.2m.

Stagecoach hopes to extend its present seven year franchise. It intends to buy new trains and believes that a call by the health and safety executive for the early replacement of older carriages equipped with so-called "slam-doors" will help its case.

The UK bus market, still its core business in terms of turnover, achieved its fourth year of organic growth although at 1.7 per cent in the year this was lower than in recent years.

Stagecoach has also begun to benefit from its overseas expansion. In Sweden, where Stagecoach acquired Swebus, the largest bus operator in the Nordic region, passenger numbers have risen sharply following the launch of new express coach services. Operating profits in the overseas bus division rose from £8m to £13.9m helped by a £7.9m seven months contribution from Swebus. Overseas bus turnover rose from £48.8m to £224.2m.

In Kenya and Malawi, where Stagecoach owns bus services, it is facing tough competition from unregulated operators and combined operating margin fell from 13.2 per cent to 8.8 per cent. After the year-end Stagecoach paid £3.7m for part of Transit Australia, comprising a contract to operate 120 buses.

Overall, the group's figures showed operating profits ahead to £148m (£55.8m) on turnover of £1.15bn (£401m). Excluding acquisitions, turnover rose 57 per cent.

Capital spending increased by £72m to £110.8m, with Stagecoach continuing to spend heavily on new buses as well as on the 30 new trains for South West Trains which Stagecoach is already committed to buy.

Cash flow improved from £86.3m to £232.7m. Depreciation increased from £27.1m to £87.2m reflecting the impact of Porterbrook and Swebus.

The proposed final dividend is 6p (4.6p) making a total of 9p (6.7p) for the year, a 34 per cent increase and covered four times by profits.

This is payable from earnings of 39.7p (19.7p).

Separately, Sandy Anderson intends to step down as chief executive of Porterbrook, a subsidiary which leases rolling stock. But Anderson, who staged the original management buy-out of the company, will handle forthcoming rail orders and will remain chairman.