Stagecoach Group’s like-for-like rail revenues increased by 5.5% in the first quarter of the current financial year - and the company says the addition of Virgin Trains East Coast to its trio of rail operations has led to total revenue increasing “substantially”.
Profits also rose by 7.5% at Virgin Rail Group (in which Stagecoach has a 49% stake), largely because until June 2014 the Virgin West Coast franchise was operated under a management contract.
However, after failing to agree a Direct Award for the South West Trains (SWT) franchise, Stagecoach now says that it does not expect SWT “to earn a significant profit during any extension period”.
The Department for Transport is expected to exercise its option to extend the SWT franchise from February 2017 to June 2017.
Other revisions to franchising are likely to result in the planned East Midlands Trains Direct Award running from October 2015 to March 2018. Until recently the Direct Award was expected to run until October 2017.