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Stagecoach loses TfL contracts

The loss of some London bus contracts with Transport for London is expected to cause revenue in this division to fall faster than previously expected
September 28, 2017

Stagecoach (SGC) is expecting revenue in the London bus division to fall more rapidly than previously expected after it lost some contracts with Transport for London. In the four months to August, like-for-like sales in this area of the business fell 0.1 per cent, but this will be a larger decline by the full year. Mileage reductions and price increases in its regional bus operations pushed revenue per available mile up by 2.8 per cent year on year and improved yield per journey, but comparable sales growth still fell by 0.4 per cent.

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After running the South West Rail franchise for two decades, Stagecoach is in the process of handing it over to its new operators, a joint venture between First Group and MTR Corporation. Excluding South West Rail, UK trains revenue was up 3.8 per cent over the quarter. The Department for Transport has extended Stagecoach’s contract for East Midlands trains until March 2019, with the potential to run further to August that year, and is negotiating the terms of the ongoing Virgin Trains East Coast operation.