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Stagecoach trundles on

Full-year results from transport operator Stagecoach were bang in line with analyst expectations
June 24, 2015

There weren't any surprises hidden in full-year results from transport operator Stagecoach (SGC). As had been expected, a strong performance from the group's joint venture with Virgin Rail offset weaknesses in North America and the UK bus division. All in all, that left adjusted operating profit up by a respectable 1.7 per cent at £227m, while a lower than expected tax rate bumped EPS up by 2.7 per cent.

IC TIP: Hold at 410p

Finance director Ross Paterson admits similar challenges will persist this year. These include sluggish demand for the group's bus services in the US, as depressed oil prices make it cheaper for people to drive themselves, and the political risk associated with possible re-regulation of bus services outside of London. But Mr Paterson isn't fazed by the road ahead. "This isn't anything dramatic," he says.

In the meantime, Stagecoach has been shortlisted for the new TransPennine Express rail franchise and in June its joint venture with Abellio was shortlisted to run the new East Anglia contract.

Analysts at Panmure Gordon have yet to update their forecasts, but previously expected pre-tax profit of £215m, giving EPS of 30.2p, for the year ended April 2016. That compares with £185m and 26.7p in the year ended April 2015.

STAGECOACH (SGC)
ORD PRICE:410pMARKET VALUE:£2.36bn
TOUCH:409-410p12-MONTH HIGH:438pLOW: 332p
DIVIDEND YIELD:2.6%PE RATIO:17
NET ASSET VALUE:16p*NET DEBT:£390m

Year to 30 AprTurnover (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20112.3919122.07.1
20122.5924029.57.8
20132.8015422.08.6
20142.9315823.19.5
20153.2016524.310.5
% change+9+4+5+11

Ex-div: 27 Aug

Payment: 30 Sep

*Includes intangible assets of £218m, or 38p a share