Slow buses hold up Stagecoach

Stagecoach is expected to post a flat pre-tax profit of around £200m this week, as a slowing bus market drags down success on the UK rail network.

The FTSE 250 group's South West Trains and East Midlands routes, plus its Virgin Rail joint venture, have seen strong revenue growth. Analysts pointed out this was in contrast to rivals such as FirstGroup, which is struggling due to growing unemployment and straitened household budgets.

But, Karl Burns, a transport analyst at Shore Capital, warned: "The key will be what management says about outlook, in particular on the UK bus side. Previously they have said they will maintain the current level of revenues. If Brian Souter, [the chief executive] can manage that, it will outperform. "

Stagecoach is also expected to outline a roll-out plan for budget business Megabus, following its acquisition of nine US depots.