Since 2019 began the transport firm has found itself stuck in the same kind of pattern it found itself in throughout 2018. Opening at £1.30, the stock quickly found its way back above £1.50, peaking at £1.68 in early March. Stagecoach Group (LON:SGC) PLC now sits at a current trading price of £1.51.
The big news coming out of December’s interim results was news it was in talks to offload its North American coach business, a division that had been hit by rising fuel and fuel costs, alongside increased competition. These talks came to fruition a couple of weeks later, when Stagecoach confirmed a £271 million sale to Variant Equity Advisors, to be completed at the end of April.
Reflecting the need for that sale was December’s half year figures, where Stagecoach swung to a pre-tax loss of £22.6 million thanks, in part, to a £85.4 million non-cash impairment from its US bus business, alongside a £24.2 million pension charge.
Revenue, meanwhile, plunged from £1.79 billion to £1.23 billion following the loss of the East Coast line and South West Trains rail franchises. However, UK rail profitability actually rose from 2.4% to 3.4%.
It has had some better news recently. December 21st saw it announce a one-year extension to its Virgin Rail Group West Coast rail franchise, while in mid-February it confirmed its East Midlands Trains subsidiary had agreed a new ‘short-term’ rail franchise with the Department for Transport.
In terms of Wednesday’s statement, investors will want to hear the US sale is all set to go through at the end of the month, as well as word on the class-action lawsuit filed against the company (alongside peers First Group and Go-Ahead Group (LON:GOG)) by unhappy commuters.
Stagecoach Group PLC(LON:SGC) has a consensus rating of ‘Buy’ alongside an average target price of £1.63.
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