Stagecoach rides high in America

If it does, much will be down to its US inter-city megabus service where like-for-like revenue sped 23 per cent higher to $90.8m (£55.4m). A big increase in margins generated underlying operating profit of $30.6m, up 40 per cent, driven largely by lower start-up losses from new services and better weather. Management predicts a big increase in full-year profit, too, but warns that costly expansion will likely subdue growth next year. Back on home soil, rising fuel costs and lower government grants nipped 50 basis points off the operating margin at Stagecoach's core regional bus business. Still, a 15.2 per cent margin remains impressive and profit grew 5.6 per cent to £76.9m after stripping out £4m of Olympics money. A tight grip on costs increased returns at the London bus operation where new contracts should return the business to revenue growth in the second half, although rising staff and energy costs weighed on rail, trimming profit there to £18m.

Investec Securities has tweaked estimates higher and expects full-year adjusted pre-tax profit of £182.4m, giving adjusted EPS of 25.1p (from £218.9m and 29.7p in 2013).