West Coast rail franchise to be extended

In its half year report Stagecoach said that Virgin Rail Group's West Coast rail franchise continues to perform strongly and that is benefitting taxpayers through profit share payments by the business to the UK Department for Transport.

The Department for Transport has indicated that it plans for the current franchise, which started in June 2014, to run until the end of March 2018 on the commercial terms already agreed.

In October West Coast Trains became the first train company to automatically compensate some customers if they are delayed. A customers who buys an Advance ticket through virgintrains.com or the app will automatically receive money directly back onto his or her payment card when their train service is delayed by 30 minutes or more.

Stagecoach said the franchise was performing significantly ahead of expectations at the time the contract was agreed. The franchise agreement includes protections for taxpayers which limit the level of profit that the business can earn and as a result, there is limited scope for further profit growth.

Stagecoach group revenue was up from £1.54 billion to £1.97bn for the six months to the end of October, but pre-tax profit fell from 98.3 million to 90.8m.

Virgin Rail Group's half year revenue rose from £247.4m to £270m.

Chief executive Martin Griffiths said: "These are a good set of results with overall earnings per share in line with expectations."

He said its bus passengers in the UK were now benefitting from the new UK Bus website, which enables them to check live running times for their bus services and purchase travel on their smart phones. In 2016 Stagecoach will also introduce a new mobile bus app.

Mr Griffiths said: "We are pleased that the Department for Transport has agreed to extend our operation of East Midlands Trains and plans to extend Virgin Rail Group's operation of West Coast Trains. This will allow us and Virgin to continue to deliver improvements to our customers, attract more people to rail travel and increase the future value of these franchises to Government."

It began operating the Virgin Trains East Coast franchise in March and has a 90 per cent interest.