Post on 26-Dec-2015
Preliminary Results 2009
Annual ResultsAnnual ResultsYear ended 30 April 2009Year ended 30 April 2009
24 June 2009 24 June 2009
Preliminary Results 20092
Definitions Like-for-like amounts are derived, on a constant currency basis, by comparing
the relevant year-to-date amount with the equivalent prior year period for those businesses and individual operating units that have been part of the Group throughout both periods.
Operating profit for a particular business unit or division within the Group refers to profit before net finance income/charges, taxation, intangible asset expenses, exceptional items and restructuring costs.
Operating margin for a particular business unit or division within the Group means operating profit as a percentage of revenue.
Exceptional items means items which individually or, if of a similar type, in aggregate need to be disclosed by virtue of their nature, size or incidence in order to allow a proper understanding of the underlying financial performance of the Group.
Net debt is the net of cash and borrowings as reported on the consolidated balance sheet, adjusted to exclude any accrued interest and deferred gains on derivatives.
Preliminary Results 20093
Robert SpeirsRobert Speirs
ChairmanChairman
Preliminary Results 20094
Highlights
Strong financial results
Revenue and operating profit growth
Adjusted EPS up 12.8%
Full-year dividend per share up 11.1%
Growing bus operations in UK and North America
Current trading in line with expectations
Preliminary Results 20095
Martin GriffithsMartin Griffiths
Finance DirectorFinance Director
Preliminary Results 20096
Financial summary
* excluding exceptional items and intangible asset expenses
Revenue
Operating profit*
Adjusted earnings per ordinary share*
Basic earnings per ordinary share
Net debt
Dividend per ordinary share
Year to 30 April 09
Year to 30 April 08
£2,103.3m
£227.8m
22.9p
18.7p
£(340.1)m
6.0p
£1,763.6m
£205.3m
20.3p
34.6p
£(319.7)m
5.4p
Change
19.3%
11.0%
12.8%
(46.0)%
6.4%
11.1%
Preliminary Results 20097
Summary income statement
UK Bus operating profit
North America operating profit excluding megabus
megabus North America operating loss
UK Rail operating profit
Share of joint ventures’ profit after tax
Restructuring costs (non-exceptional) and group overheads
Operating profit
Finance charges (net)
Tax
Profit excluding intangibles and exceptionals
Intangibles and exceptionals, net of tax
Reported profit from continuing operations
Year to 30 April 09
£m
Year to 30 April 08
£m
125.6
28.0
(2.8)
55.7
35.3
(14.0)
227.8
(31.4)
(33.0)
163.4
(29.9)
133.5
109.9
23.9
(2.9)
59.1
32.6
(17.3)
205.3
(30.9)
(28.3)
146.1
83.1
229.2
Change£m
15.7
4.1
0.1
(3.4)
2.7
3.3
22.5
(0.5)
(4.7)
17.3
(113.0)
(95.7)
Preliminary Results 20098
UK Bus
Strong, consistent like-for-like revenue growth throughout 2008/9
Revenue and journeys benefiting from marketing campaigns, investment in fleet, excellent value fares and concessionary fare schemes
Acquisitions of small, complementary businesses
First full year of new national concessionary fare scheme ended March 2009
Flexible cost base – contingency plans in place for any revenue slowdown
Revenue (£m)
Like-for-like revenue (£m)
Operating profit (£m)
Operating margin (%)
Estimated like-for-like passenger journeys (m)
Like-for-like vehicle miles operated (m)
Year to 30 April 09
Year to 30 April 08
830.8
799.0
125.6
15.1%
646.1
317.2
743.9
733.4
109.9
14.8%
625.9
312.0
Change
11.7%
8.9%
14.3%
0.3%
3.2%
1.7%
Preliminary Results 20099
North America (excluding megabus)
Overall solid performance
Further margin improvement
Expansion of megabus.com
New York sightseeing joint venture from 31 March 2009
Revenue (US$m)
Like-for-like revenue (US$m)
Operating profit (US$m)
Operating margin (%)
Year to 30 April 09
Year to 30 April 08
463.7
407.4
47.0
10.1%
474.3
399.3
48.0
10.1%
Change
(2.2)%
2.0%
(2.1)%
0.0%
Preliminary Results 200910
UK Rail (wholly-owned)
Reduced revenue growth rate
Revenue now below franchise target
c.£50m annualised cost savings implemented
Revenue (£m)
Like-for-like revenue (£m)
Operating profit (£m)
Operating margin (%)
Estimated passenger miles (m) - South Western
- East Midlands
Year to 30 April 09
Year to 30 April 08
977.7
689.5
55.7
5.7%
3,298.4
1,206.9
777.8
649.3
59.1
7.6%
3,228.7
1,188.0
Change
25.7%
6.2%
(5.8)%
(1.9)%
2.2%
1.6%
Preliminary Results 200911
Impact of UK Rail, revenue changes
Illustrative passenger revenue per annum (£m)
1% change on revenue (£m)
1% change on revenue post 28% tax (£m)
Impact on adjusted earnings per share (pence)
East Midlands
Virgin Rail Group (49%)
257.7
2.6
1.9
0.3
322.3
3.2
2.3
0.1*
Total
1,254.7
12.5
9.0
1.1
South Western
674.7
6.7
4.8
0.7
The analysis shown above is for illustrative purposes only to show how a 1% change in revenue affects earnings per share, assuming no changes in costs and based on the number of shares (715.0m) ranking for dividend as at 30 April 2009.
* Impact on earnings is net of 80% revenue support for Virgin Rail Group
Preliminary Results 200912
South Western TrainsContractual matters
In dispute with Department for Transport regarding aspects of the franchise agreement
Period covered by revenue support
Treatment of car park revenue (LENNON element) when calculating revenue support
Seeking resolution through arbitration
Appropriate legal advice taken and we consider our position to be strong
Preliminary Results 200913
Virgin Rail Group
Poor Network Rail operational performance Significant compensation received
c.30% more services from January 2009 Revenue support available from December 2008
First support payment applied for in June 2009 c.£10m annualised cost savings
Revenue – 49% share (£m)
- West Coast (£m)
- West Coast like-for-like (£m)
- CrossCountry (£m)
Operating profit – 49% share (£m)
Operating margin (%)
Dividends received (£m)
Estimated like-for-like passenger miles (m) – West Coast
Year to 30 April 09
Year to 30 April 08
322.3
322.3
302.9
-
42.7
13.2%
43.9
2,515.0
394.0
310.3
301.9
83.7
41.9
10.6%
30.5
2,553.0
Change
(18.2)%
3.9%
0.3%
(100.0)%
1.9%
2.6%
43.9%
(1.5)%
Preliminary Results 200914
Miscellaneous income statement items
Twin America joint venture (New York Sightseeing) commenced 31 March 2009
Exceptional items include £12.0m (2008: £Nil) of UK Rail restructuring costs
Citylink joint venture (£m)
Splash Tours joint venture (£m)
Twin America joint venture (£m)
Intangible asset expenses (£m)
Group overheads (£m)
Restructuring costs (non-exceptional) (£m)
Post-tax exceptional items (£m)
Year to 30 April 09
Year to 30 April 08
1.0
(0.6)
0.9
(13.4)
(11.5)
(2.5)
(18.7)
0.8
(0.4)
Nil
(13.0)
(13.0)
(4.3)
113.9
Change
25.0%
50.0%
-
3.1%
(11.5)%
(41.9)%
(116.4)%
Preliminary Results 200915
Finance charges and credit ratios
Net Group finance charges* (£m)
EBITDA from continuing operations and joint ventures* (£m)
Year-end net debt (£m)
Net Debt/EBITDA*
EBITDA*/Net finance charges
Year to 30 April 09
Year to 30 April 08
(31.4)
299.9
(340.1)
1.1x
9.6x
(30.9)
271.9
(319.7)
1.2x
8.8x
Change
1.6%
10.3%
6.4%
(0.1)x
0.8x
* excluding exceptional items
Preliminary Results 200916
Liquidity Excellent liquidity
£473.5m undrawn committed core bank facilities available for cash drawings at 30 April 2009
Sufficient bank facilities to refinance US$ bond (US$293.1m) in November 2009
Key refinancing required by 2012
Other undrawn available credit lines – e.g. asset finance
Operating well within bank covenants
Cash generative
Upward pressure on debt pricing
Monitoring all financing alternatives, including debt capital markets
Preliminary Results 200917
Taxation
Excluding intangible asset expenses and exceptional itemsIntangible asset expensesExceptional items
Joint venture taxation for reporting purposes
Reported in income statement
Cash tax paid (net)
Pre-taxProfit£m
Tax£m
207.8(13.4)(12.2)182.2(11.4)
170.8
(44.4)2.2
(6.5)(48.7)11.4
(37.3)
(3.7)
Rate%
21.4%16.4%
n/a26.7%
n/a
21.8%
Year to 30 April 2009
Preliminary Results 200918
EBITDA from Group companies before exceptional itemsLoss on disposal and impairment of plant and equipmentEquity-settled share based paymentDividends from joint venturesMovement in retirement benefit obligationsWorking capital movementsExceptional restructuring costsNet interest paidTax paidNet cash from operating activitiesNet capital expenditure including new hire purchase and finance leasesAcquisitions of businesses, intangibles and investmentsToken sales and redemptions/othersCash generationForeign exchangeEquity dividendsShare capital movementsIncrease in net debtOpening net debtClosing net debt
Year to 30 April
2009£m
264.62.23.1
44.9(32.0)43.7
(12.0)(33.0)
(3.7)277.8
(170.7)(26.2)
(1.5)79.4
(58.3)(41.8)
0.3(20.4)
(319.7)(340.1)
Movement in net debt
Preliminary Results 200919
71.517.1
Nil88.6
113.233.436.9
183.5
(9.3)(3.4)(0.1)
(12.8)
103.930.036.8
170.7
41.716.336.994.9
Capital expenditure
UK BusNorth AmericaUK Rail
New hire purchase
and financeleases
£m
Impact ofcapex onnet debt
£m
Disposalproceeds**
£m
Net2008/9Actual
£m
Cash spent on capex*
£m
* Excludes capitalised intangible assets and assets acquired through business combinations
** Excludes proceeds from selling businesses
Preliminary Results 200920
Fuel Hedging
2008/9 - average effective price (per litre)
2009/10 - % of forecast consumption hedged
- average hedge price (per litre)
2010/11 - % of forecast consumption hedged
- average hedge price (per litre)
2011/12 - % of forecast consumption hedged
- average hedge price (per litre)
Market price (per litre)
UK BusNorth
America
32.0p
96%
46.1p
90%
35.9p
10%
37.2p
30.2p
63.1 cents
76%
82.2 cents
75%
50.5 cents
10%
54.2 cents
48.6 cents
UK Rail
33.4p
75%
31.3p
75%
31.3p
-
-
30.2p
Market prices are as at 19 June 2009
Prices exclude premia payable on fuel caps, delivery margins, duty, taxes and Bus Services Operators Grant
Preliminary Results 200921
(172.9)
74.7
(98.2)
(32.8)
(5.4)
(136.4)
(3.5)
1.2
(20.0)
(158.7)
(191.8)
75.5
(116.3)
(42.6)
(5.0)
(163.9)
(7.9)
3.1
(21.7)
(190.4)
Fuel costsLatest forecasts
UK Bus, excluding BSOG*
UK Bus, BSOG*
UK Bus, including BSOG*
North America
South Western Trains
2008/9 UK Bus Acquisitions+, excluding BSOG*
2008/9 UK Bus Acquisitions+, BSOG*
East Midlands Trains
Total
2008/09Actual
£m
2009/10Forecast
£m
Fuel costs
(150.1)
68.5
(81.6)
(25.1)
(4.3)
(111.0)
-
-
(8.9)
(119.9)
2007/08Actual
£m
Market prices are as at 19 June 2009, when Brent Crude was US$70 per barrel
Forecast costs for the unhedged element of fuel are based on 19 June 2009 spot prices
Above costs include delivery margins, duty and taxes (duty forecast at current levels) but exclude 3rd party fuel costs
* Bus Services Operators Grant (“BSOG”) represents a rebate of an element of fuel duty costs in respect of certain UK Bus services+ Bullocks, Highland (Rapsons), Cavendish, Preston Bus, Eastbourne
189.0
-
189.0
76.6
12.0
277.6
7.8
-
51.1
336.5
2009/10ForecastLitres m
Volumes
(176.5)
75.5
(101.0)
(31.2)
(5.0)
(137.2)
(7.3)
3.1
(21.7)
(163.1)
2010/11Forecast
£m
(171.4)
75.5
(95.9)
(30.8)
(5.0)
(131.7)
(7.0)
3.1
(21.1)
(156.7)
2011/12Forecast
£m
Preliminary Results 200922
Brian SouterBrian SouterChief ExecutiveChief Executive
Preliminary Results 200923
UK Rail
Weakening demand, but strong balance sheet to manage business cycle
Strong operational performance Delivery on franchise commitments to passengers and
Government Decisive management action to minimise risk and maximise
opportunities Cost reduction programme Revenue generation: new timetables, new stations, gating, off-
peak travel
Preliminary Results 200924
North America
Flexible business model
Weaker leisure demand
megabus.com ahead of expectations
Twin America joint venture
Preliminary Results 200925
UK Bus
Strong performance and flexible business model
Successful and growing provincial bus operations
Around 19% of UK bus market outside London
Not index-related (eg, regulated London bus operators)
Stagecoach differentiation in market
Above-industry growth rates
Successful discount ticketing strategy
Bolt-on acquisitions and continued investment
Successful partnerships
Preliminary Results 200926
0
20000
40000
60000
80000
100000
120000
Pas
sen
ger
s 00
0 p
a
Stagecoach Manchester
Adults
Concess
Total
Growing the market for bus travel
Passenger volumes up 27% since 2003/04 Discount ticketing strategy: weekly travel £11 £40m vehicle investment in past four years
Preliminary Results 200927
Growing online sales
Investment in UK and North America online sales sites
Buymymegarider.com, Buymyunirider.com
Megabus.com
Coachusa.com
Total online bus and rail sales increasing
Total bus internet sales in UK and North America up 62% compared to 2007/08
SWT and EMT up 23% compared to 2007/08
Total Group online sales now around £110m p.a.
Preliminary Results 200928
Current trading and outlook
UK Bus performing strongly
Flexibility to respond if revenue weakens
Challenging year at UK Rail
Weak demand and significant step up in premium payments
Manageable through action plans and strong Group balance sheet
Current trading in line with management expectations
Preliminary Results 200929
Fundamentals
Business prepared to weather economic environment
Stagecoach track record of organic growth and product development
High-quality operational performance and good cashflows
Public transport central to Government action on congestion and climate change
Preliminary Results 200930
Annual ResultsAnnual ResultsYear ended 30 April 2009Year ended 30 April 2009
24 June 2009 24 June 2009
Preliminary Results 200931
Appendices
Preliminary Results 200932
UK Bus Revenue
Like-for-like
Acquisitions:Highland excluding Inverness depot (acquired May 2008)Inverness depot (integrated Highland and Bluebird business)Fens (acquired March 2008)Rennies (acquired March 2008)Preston Transport (acquired January 2009)Eastbourne (acquired December 2008)Cavendish (acquired January 2009)
Disposals:Darlington (disposed August 2007)Huddersfield (disposed April 2008)
Start-ups:Rail replacement (started May 2008)
Total reported
Change%
8.9%
11.7%
Year to30 April 2009
£m
Year to30 April 2008
£m
799.0
9.38.64.52.42.31.70.2
--
2.8
830.8
733.4
-6.10.40.3---
1.02.7
-
743.9
Assets of Bullocks integrated with existing operations and now not distinguishable from like-for-like revenue
Preliminary Results 200933
Scheduled service/line run/commuter/casinoCharterSightseeing & tourSchool bus & contractLike-for-like revenue (excluding Megabus)“Disposed” & closed operations and Canada fxTotal North America (excluding Megabus)MegabusTotal North America
Year to 30 April
2009US$m
Year to30 April 2008
US$m
199.295.820.891.6
407.456.3
463.735.8
499.5
200.192.219.887.2
399.375.0
474.311.3
485.6
% Growth
(0.4)%3.9%5.1%5.1%2.0%
(2.2)%
2.9%
North America revenue breakdown
Preliminary Results 200934
Divisional income statementsYear ended 30 April 2009
Revenue
Rail franchise support
Other operating income
Staff costs
Fuel costs (i.e. diesel)
Insurance and claims costs
Depreciation
Rolling stock costs – lease & maintenance
Other operating leases
Network Rail
Electricity for trains
Commissions payable
Materials & consumables
Other costs
Operating profit
UK Bus £m
North America
£m
830.8
Nil
14.0
(417.8)
(100.5)
(32.8)
(50.4)
Nil
(11.1)
Nil
Nil
Nil
(35.8)
(70.8)
125.6
297.7
Nil
3.6
(129.0)
(32.8)
(20.1)
(19.5)
Nil
(5.0)
Nil
Nil
Nil
(19.7)
(50.0)
25.2
UK Rail£m
977.7
(66.4)
68.4
(264.5)
(31.9)
(5.5)
(2.1)
(185.3)
(7.2)
(238.1)
(41.1)
(24.5)
(36.7)
(87.1)
55.7
Virgin Rail Group (100%)
£m
657.7
15.3
105.9
(141.2)
(9.2)
(4.3)
(0.4)
(211.9)
Nil
(173.4)
(28.0)
(41.2)
Nil
(82.1)
87.2
Preliminary Results 200935
Rail subsidy/(premium) profiles
2009
2010
2011
2012
2013
2014
2015
2016
2017
South Western
£m
East Midlands
£m
21.1
(42.0)
(93.2)
(149.7)
(218.6)
(286.8)
(355.1)
(429.0)
(422.6)
121.7
98.5
62.2
19.6
(11.2)
(30.2)
(85.7)
-
-
West Coast£m
288.1
279.5
225.5
191.1
-
-
-
-
-
Year to 31 March:
The above amounts are subject to adjustment for: (1) various inflation measures (2) risks borne by the Department for Transport (3) called options and (4) changes in Regulated Network Rail charges. The amounts shown above are based on estimated inflation and options called to date.
The amounts shown above do not reflect charges arising from changes to Network Rail charges for Control Period 4, which began on 1 April 2009, because these charges are not yet finalised.
Preliminary Results 200936
Exchange rates
US$C$
Closing rate Average rate
1.98061.9947
2.00722.0525
April 2008
Closing rate Average rate
1.48181.7605
1.67801.8955
April 2009
Preliminary Results 200937
Annual ResultsAnnual ResultsYear ended 30 April 2009Year ended 30 April 2009
24 June 2009 24 June 2009