Flotation will value Stagecoach at pounds 100m

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The Independent Online
STAGECOACH Holdings, one of the UK's largest independent bus companies, is to come to the market in April in a flotation expected to value the business at more than pounds 100m.

The company, which also runs a charter ticket service on British Rail's London to Aberdeen service, was founded in 1980 by its present chairman Brian Souter, with an initial investment of pounds 45,000. He and his sister, the company's managing director, own 90 per cent of the equity.

In the year to April 1992 pre-tax profits were pounds 8.2m from sales of pounds 140.7m, more than three times 1991's pounds 2.5m profit from sales of pounds 103.3m. The company employs 11,000 people and operates 3,300 buses.

Stagecoach started life running two coaches on long-distance routes that had been deregulated in Scotland. In 1986 the break-up of local authority monopolies on local bus services presented a new opportunity.

The company now runs 11 local services from the Highlands of Scotland to the Sussex coast and has operations in Hong Kong, Malawi, Kenya and New Zealand.

Mr Souter says the proceeds of the share sale will give Stagecoach 'the resources to take the company on to the next stage of its development'.

Plans include acquiring more local services in the UK, expanding overseas and, depending on the terms of franchises offered by the government, taking part in the privatisation of British Rail.

Mr Souter is confident that running rail services in tandem with its existing bus routes will result in relatively low fixed costs.

That should allow Stagecoach to make profits on a lower subsidy than would be viable for potential competitors.

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