IT has been a difficult few months for Scotland’s two listed transport giants.
Aberdeen-based FirstGroup parted company with long-standing boss Tim O’Toole earlier this month. His departure came amid mounting concern over the bus and rail giant’s performance, which appeared to intensify after bosses knocked back a takeover approach from Apollo, the US investment firm. It also brought to the surface again suggestions that FirstGroup, which reported a £327 million loss this month after slashing the valuation of its Greyhound coach business in the US, could be broken up.
The difficulties being faced by Stagecoach, which also has a significant bus operation across the Atlantic, are more local. Its woes on the East Coast rail franchise manifested themselves again yesterday, when it booked exceptional costs of £85.6 million related to the loss of the contract. Adjusted profits dipped to £144.8m from £151m.
Stagecoach had already made significant losses from running the line last year, as it became clear the franchise was not going to deliver the returns it had anticipated.
The company will certainly be hoping that changes to the franchise model, designed to ensure operators and government share the revenue risk more fairly, will make the experience more rewarding should it ever win the right to run it again.
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