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Stagecoach gives North American division a ticket to ride
Posted on Thursday, 06 December 2018 11:01
Stagecoach is in ongoing discussions regarding a sale for all or part of its North American arm as part of a review of strategic options.
The group operates around 2,100 buses and coaches in the US and Canada, and its megabus.com subsidiary runs a network of inter-city services in the region.
In addition, it is also involved in commuter, transit, contracted, charter, airport shuttle and sightseeing activities.
Stagecoach’s North America Division remains profitable and forecasted 2018-19 operating profit has not significantly changed since the time of the group’s September trading update.
However, as noted in at that time, like-for-like revenue has declined and year-to-date profit has been below the internal budget, which reflects increased competition, among other factors.
The regional division booked USD 323.30 million at its top line in the six months ended 27th October 2018 (H1 2018: USD 333.90 million) and had like-for-like turnover of USD 323.90 million (H1 2017: USD 333.90 million).
It had operating profit of USD 21.20 million for the period and a margin of 6.6 per cent, compared with USD 27.60 million and 8.3 per cent, respectively, in H1 2017.
Stagecoach noted the group will record a GBP 85.40 million non-cash goodwill impairment to reflect revised view of long-term profitability.
The North America business had net assets (excluding cash, debt, tax and inter-company balances, and after taking into the writedown) of USD 249.00 million as at 27th October 2018.
Stagecoach is focused on new opportunities of growing its scheduled service (including megabus.com) and contract revenue business in the region.
There have been 71 deals announced in 2018 to date that target the charter bus and interurban and rural bus transportation industries, according to Zephyr, the M&A database published by Bureau van Dijk.
At USD 157.19 million, the purchase of a 29.9 per cent stake in Sichuan Fulin Transportation Group by Ningbo Taihong Business Management and Yongfeng Group is currently the largest by value.
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