Congestion charge drives bus profits higher at Stagecoach

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The Independent Online

Stagecoach yesterday said the congestion charge had helped drive up sales from its London bus business nearly 20 per cent.

The bus and train operator, which has undergone a dramatic restructuring involving a series of disposals, also announced a solid performance from South West Trains. Profits there were £21.5m in the six months to 31 October from £18.9m in the same period a year before on a 3.1 per cent increase in passenger numbers.

In the first half of the year Stagecoach made a pre-tax profit of £60.3m, before accounting for goodwill and exceptional items, down from £75.2m. Turnover fell to £963.8m from just over £1bn. The figure, which beat most analysts' forecasts, was also helped by a decent performance from Coach USA, which turned out a profit of £15.9m - marginally ahead of last year.

Brian Souter, the chief executive, said: "These are a strong set of results and reflect the significant progress we have made across the group in the past six months in delivering on our strategy."

Analysts at WestLB Panmure said: "It must be the first time that Coach has actually outperformed expectations since Stagecoach acquired the business."

Stagecoach added that trading since the start of the second half of the year was "encouraging" and that it was comfortable with the current forecasts in the market.

The company, which raised its dividend 12.5 per cent to 0.9p, said the restructuring of the Coach business was nearing completion with negotiations of its remaining taxi businesses at "an advanced stage".