Stagecoach Leaves Summer Rail Chaos Behind It to Hit 2018 Highs
(Bloomberg) -- The problems that plagued Britain's railways over the summer appear to have neither hurt earnings at one of its main operators nor reduced its appetite to double down on U.K. transport, even in the shadow of Brexit.
Stagecoach Group Plc shares hit a 2018 high, rising as much as 15 percent, after interim results outpaced analyst expectations. The beat was driven by strong profitability and some one-time gains in its U.K. rail arm and a good performance in its bus division, leading the company to increase its guidance for full-year adjusted earnings per share.
For good measure, the group said it will assess the future of its U.S. operations, including a potential sale. The review shows Stagecoach's willingness to evaluate and optimize its portfolio, according to RBC Capital Markets analyst Damian Brewer.
The good performance in rail stands in contrast to a summer of travel chaos in the U.K., which prompted the government to say it will rethink its strategy in the most sweeping review of the rail franchise system since privatization in the 1990s. Stagecoach, however, is undeterred and said it has been shortlisted in the bidding for three more domestic franchises.
To contact the reporter on this story: Sam Unsted in London at sunsted@bloomberg.net
To contact the editors responsible for this story: Beth Mellor at bmellor@bloomberg.net, Paul Jarvis
©2018 Bloomberg L.P.
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