Coach USA/Coach Canada posts gain in operating profit

PERTH, Scotland – Stagecoach Group has reported that Coach USA/Coach Canada and had essentially flat revenue but a substantially higher operating profit during the first half of fiscal 2018.

Coach USA/Coach Canada, along with, are subsidiaries of Perth-based Stagecoach Group and the largest operator of motorcoaches in North America, with a fleet of roughly 2,200 buses. (No. 2 Greyhound Lines has a fleet of 1,600 coaches.)

Combined like-for-like revenue at Coach USA/Coach Canada and for the six months ended Oct. 28, 2017, was $333.3 million, or 0.1 percent higher than during the same period the prior year. The gain came despite a 4.6 percent slide in revenue at

Stagecoach noted, however, that business at in North America “continues to show some signs of improvement.” Year-over-year revenue per vehicle mile increased 3.2 percent, “reflecting the changes we made to our network to better match our services with customer demand.”

Combined operating profit for the five business lines that make up Coach USA/Coach Canada –, scheduled service, charter, contract services and sightseeing/tour operations – was $27.6 million, up 21.2 percent from the first six months of fiscal 2017.

The combined first-half fiscal 2018 operating margin at Coach USA/Coach Canada and rose to 8.3 percent from 6.7 percent a year earlier.

Most of that gain was accounted for by contract services, which saw revenue jump to $72 million from $58.7 million a year ago, a 22.7 percent increase.

Revenue at the other business units was little changed or lower during the first half of fiscal 2018. Charter revenue was down 8.3 percent, sightseeing/tour revenue was down 13.2 percent, subsidies from local governments were down 12.9 percent, schedule service commercial revenue was up 0.7 percent and, as noted, revenue was down 4.6 percent to $97 million.

Still, in issuing its half-year trading update, Stagecoach noted that “revenue trends in North America have improved. Contract revenue has benefitted from tender wins, including rail replacement work.” Lower fuel costs also helped.

Stagecoach said it was “encouraged by further additional revenue generated from our focus on contract opportunities.”

In the first half of the year, Coach USA provided replacement commuter and other bus service because of train disruptions at New Jersey Transit and the Long Island Rail Road as a result of track repair work at Pennsylvania Station in New York.

“This has contributed to the reduction in charter revenue as we deployed some vehicles on the rail contract work that would otherwise have been available for charter,” Stagecoach said. “Elsewhere, weak sightseeing markets have impacted some of our services, and we see potential to restructure our sightseeing operations to improve profitability.”

Stagecoach said it remains “on course to grow the division’s operating profit in 2017/18, reflecting our targeted pursuit of contract opportunities, and management action to match our services with customer demand at our intercity coach business.”

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