Rail and bus operator Stagecoach has seen fewer passengers travelling to major cities following the recent terrorist attacks in Paris, which has resulted in a slowdown in the transport group’s revenue growth, it was reported on Wednesday.
Several of the company’s regional UK bus businesses have reportedly seen “softer than expected revenue” and the company has cut its full-year earnings forecast. This has resulted in a 13.3% drop in Stagecoach shares to GBP3.096. However, the fall in the company’s share price can also be attributed to other factors such as the company’s withdrawal from the East Anglia rail bidding process, along with other challenges in the transport sector.
Stagecoach’s discretionary travel is said to have been hit the most, with fewer journeys to London on its South West train network outside usual commuter times. as well as fewer journeys between Oxford and London on its regular coach service.
Chief executive of Stagecoach Martin Griffiths, was quoted as saying that the company was investing in making travel better and easier for customers and called for the public sector to “tackle the growing challenge of road congestion”, which is said to be another factor that weighed on the company’s bus business.
In addition to operating bus journeys to London and other UK cities such as Liverpool, Newcastle, Manchester, Sheffield and Cambridge, Stagecoach also operates Megabus long-distance coaches in North America, Europe and the UK.
Stagecoach also runs East Midlands Trains and operates the East Coast and West Coast rail franchises in partnership with Virgin. The firm has extended the deal to run the East Midlands trains and expects its joint venture with Virgin to continue.
Griffiths was also cited as commenting that overall the Group is in good financial shape and “we were pleased to have put new bond financing arrangements in place earlier this year.”
He added that while challenges remain in our sector in the short term, “the underlying strength of our businesses across the UK, continental Europe and North America, means we are well placed to drive value for our customers and investors”.