Stagecoach shares slide 4% on US bus worries

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The Independent Online

Stagecoach Holdings, the transport group, yesterday further dented investor confidence with the news that its US bus operations continue to be hit by slower growth.

Stagecoach Holdings, the transport group, yesterday further dented investor confidence with the news that its US bus operations continue to be hit by slower growth.

Brain Souter, chairman, told the company's annual general meeting that a tight labour market in America meant that drivers are not available for new work commitments.

He added that the increased cost of business, which has also been hit by the high oil price, meant the benefits of a cost reduction programme would not be seen until next year. Stagecoach shares closed down almost 4 per cent yesterday at 68.5p.

Over the last year, the company has seen the departure of its chief executive, Mike Kinsky, and issued a profits warning in April. Mr Souter said that new UK bus business in the south did not compensate for a further reduction in passenger volumes in the north.

He also said industrial relations were difficult and this will have some significant impact in the current year. Stagecoach has been hit by a series of strikes this year by drivers over pay. The company said its train operations remained healthy.

Richard Hannah, an analyst at Deutsche Bank, said: "Shareholder nerves have already been rattled over the last 12 months and it doesn't take much to shake them now."

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