Stagecoach interims lower as co-founder Souter steps down

Transport operator Stagecoach on Wednesday reported lower interim profits as poor weather and the loss of rail franchises took their toll while chairman Brian Souter said he was stepping down.

Revenue from continuing operations fell to £800.2 from £1bn while pre-tax profit fell to £66.6m from £73.1m a year ago, reflecting the loss of the West Coast and East Midlands rail franchises.

UK bus profits were also hit as a result of poor summer weather, the company said,.

Souter said Ray O'Toole would replace him January 1 as part of a boardroom shakeup, while his sister and co-founder Ann Gloag and Ewan Brown would also step down as non-executive directors on December 31.

Stagecoach said market conditions remained “challenging” in the north of England.

“There nevertheless remains a major opportunity for the business in driving modal shift from the car to bus as governments across the globe face growing expectations from citizens to address climate change, poor air quality and crippling road congestion,” it said.

Stagecoach in June said it was moving away from rail to focus on its bus and coach business after being disqualified from the auction of three major routes including the East Midlands and West coast mainlines, the latter of which it operated with Virgin after it was unwilling to take on pensions liabilities.