STAGECOACH Group says it will not be bidding for franchises again unless the Department for Transport modifies the amount of risk franchise-holders are expected to take.
Stagecoach is currently taking legal action against the Department after its bids for West Coast Partnership, East Midlands and Southeastern were all rejected as ‘non-compliant’ in April. Stagecoach had bid for West Coast Partnership in partnership with SNCF and Virgin.
Since then, it has emerged that Arriva is also taking the DfT to court after its bid for East Midlands was rejected for the same reason.
Stagecoach’s decision is contained in its preliminary results for the year ended 27 April 2019, which were published this morning. Profit before tax was £132.9 million, up almost £5 million on the year before, and the dividend remains unchanged at 7.7p.
As a result of the company’s decision, the last Stagecoach trains are now set to run at the end of March 2020, when the Virgin/Stagecoach franchise on the West Coast Main Line will give way to the new West Coast Partnership. The company said the Group was being ‘repositioned to drive long-term profit growth from UK bus business’.
Stagecoach chief executive Martin Griffiths said: ‘I am pleased to report good financial results as we reposition the business. We continue to focus on driving growth at our core high quality bus and coach operations in the UK, but we have no intention to bid for new UK rail franchises on the current risk profile offered by the Department for Transport.’