Business

Stagecoach blames Paris attacks for fall in passengers

Megabus Image copyright Getty Images

Stagecoach has blamed the Paris terror attacks for a slowdown in revenue growth at the transport group.

The rail and bus operator cut its full-year earnings forecast as it said passengers had cut back on trips to big cities since last month's attacks.

The company also said there had been "softer than expected revenue" for several of its regional UK bus businesses.

Shares in Stagecoach closed down 14.4% to 304.7p in response.

However, the fall in the share price was also due to other factors mentioned in the statement released with its half-year results, said Nomura analyst James Hollins.

"The combination of a cautious outlook, withdrawal from the East Anglia rail bidding process and clear indication from management that exceptional shareholder returns should not be expected near-term are likely to drive market concerns," he said.

Chief executive Martin Griffiths admitted that "challenges remain in our sector in the short-term".

Stagecoach said that discretionary travel had been worst hit, with fewer journeys to London on its South West train network outside usual commuter times.

There were also fewer journeys between Oxford and the capital on its regular coach service.

Growth rates 'recovering'

Finance director Ross Paterson said passenger journeys had started to return to more normal levels.

"We are certainly seeing it recovering, the growth rates, particularly over the last week - they're starting to pick up again," he said.

Stagecoach runs East Midlands Trains and operates the East Coast and West Coast rail franchises in partnership with Virgin.

The company also has bus operations in cities including London, Liverpool, Newcastle, Manchester, Sheffield and Cambridge as well as Megabus long-distance coaches in North America, Europe and the UK.

Lower motoring costs in the US and Canada had reduced demand for Megabus inter-city services, Stagecoach said, prompting a review of its operations there.

For the six months to 31 October, revenue rose £430m to £1.97bn, with pre-tax profit up £12.9m to £121.5m.

The interim dividend was raised by 9.4% to 3.5p.