# Stagecoach Group PLC Forecast unchanged

- Link: https://www.directorstalkinterviews.com/stagecoach-group-plc-forecast-unchanged/412794462
- Published: 2019-10-03T07:33:12+01:00
- Author: Giles Arbor

**Introduction**

**Stagecoach Group plc** (LON: SGC) has today provided a trading update in respect
of its financial year ending 2 May 2020, ahead of a series of meetings with analysts.

Our forecast of the Group’s adjusted earnings per share (both inclusive and exclusive
of rail businesses) for the year ending 2 May 2020 is unchanged from when we announced
our full year results in June 2019.

**Bus operations**

The financial performance of our non-rail operations has been broadly in line with
our expectations.

We are pleased by the strong performance during the period of our UK Bus (London)
Division, where favourable service performance has resulted in higher than anticipated
Quality Incentive Contract income. We are also encouraged with our performance on
current year tenders for Transport for London contracts, and believe our bidding
strategy will support the long-term [sustainability](https://www.directorstalkinterviews.com/sustainability-green-stocks-news)
of the business.

Like-for-like revenue growth at our UK Bus (regional operations) Division was 1.0%
for the twenty weeks ended 14 September 2019. That lower than anticipated growth
is below the growth rate we reported last year, reflecting various factors including
2018’s exceptionally good summer weather contrasting with this summer’s poorer weather
and the non-recurrence of prior year revenue from operating bus services related
to rail re-signalling work in the Derby area. We continue to see regional variations
in performance, with patronage trends typically strongest in urban areas and the
southern half of the country. We remain focussed on initiatives to grow revenue 
over the longer term and are exploring potential new income streams, including partnerships
with airports, festivals and events around the UK.

**Rail operations**

We have worked collaboratively with the new operator to ensure the smooth transition
of the East Midlands rail franchise. We are proud to have operated the franchise
for 12 years and are most grateful to all of our employees and partners who have
been involved in delivering our transformation of the East Midlands rail network.
We and our joint venture partner, Virgin, will approach the forthcoming transition
of the West Coast franchise in the same spirit of collaboration.

We continue to pursue our claims against the Secretary of State for Transport regarding
his decisions to disqualify us from three rail franchise competitions. The three
cases are due to be heard in the High Court in early 2020.

**Share buyback programme**

On 25 April 2019, Stagecoach Group plc announced a share buyback programme to buy
back shares with an aggregate market value of no more than £60m. Since then until
the close of business on 2 October 2019, the Company bought back 21,830,035 ordinary
shares at a cost of approximately £28.5m.

The Board is satisfied that the programme has largely achieved its objective of 
making appropriate use of our cash, whilst retaining a good financial position and
maintaining an investment grade credit rating. In line with the Company’s strong
capital discipline, the Board now plans to continue the programme until around £
30m of shares have been bought back.

**Interim results**

The next planned update is the announcement of the Group’s interim results for the
half-year ended 26 October 2019 on 11 December 2019.

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