Acquisitions help push Stagecoach up 47%: Bus company continues fast growth since flotation

STAGECOACH, Britain's biggest quoted bus company, continued on its fast growth track since flotation with a 47 per cent jump in interim profits.

The Perth-based group made pounds 8.8m before tax in the 24 weeks to 16 October on turnover that rose from pounds 68.7m to pounds 80.7m.

There is an interim dividend of 1.5p and the company forecast a final dividend of 2.5p, to give 4p for the year, against the pro forma 3.8p suggested in the prospectus when Stagecoach floated in April.

Brian Souter, chairman, said the company was making the dividend forecast to avoid any confusion in the company's first full year since it came to the market. He said the market might have interpreted the higher-than-expected interim payout as a sign that this year's total would be as much as 4.5p.

Mr Souter was especially pleased with the contribution from acquisitions, which added pounds 429,000 to operating profits. The company has made three significant purchases since flotation - two of them since the end of yesterday's reporting period - which have boosted turnover by pounds 55m.

Mr Souter said: 'We've been very successful at buying companies that were privatised through management buyouts, but less successful with new privatisations, which have tended to represent not such good value.'

He said the group was still looking for more takeovers, with an eye on the privatisation of London Buses, which is scheduled to happen in the next year. But he warned that the Government would have to clarify the issue of deregulation of bus services in London, which has been postponed.

'The London bus companies will need longer contracts to ensure the privatisation is successful,' he said.

Derek Scott, finance director, said debt gearing would be about 125 per cent at the year- end, assuming the company did not make more acquisitions. Mr Souter said that there were no plans for a rights issue to fund Stagecoach's growth, but that there would be no problem in going back to the stock market.

The shares rose 1p to 149p.