Stagecoach game for rail franchises despite east coast line debacle
Not even a shareholder dividend cut of 35% can dissuade Martin Griffiths and co from re-bidding
If you’ve just written off the thick end of £200m on a single job, a sum equivalent to 25% of your company’s now-reduced stock market value, you might prefer to run away from more work in the same line of business. Not Stagecoach.
The first set of annual figures since the east coast mainline debacle delivered a thumping 35% dividend cut to shareholders but chief executive Martin Griffiths championed “the good opportunities” the group still sees in the UK rail market. Stagecoach will re-bid for the west coast main line and East Midlands Trains franchises and make a pitch for the new South Eastern gig.
Transport secretary Chris Grayling’s decision was surprising given his vehement opposition to public control of rail. But he said the move was partly to expedite the planned east coast partnership, which would see a contract re-let to a private firm in 2020. However, several train companies – such as South Western, TransPennine Express and Greater Anglia – face similar struggles to Stagecoach and Virgin after overbidding for franchises and events may yet force his hand again.
Why is this rail timetable change significant?
New timetables are published every year but normally with minor tweaks. This year Govia Thameslink Railway, which carries about 500,000 passengers daily, has redrawn its schedules from scratch.
Source: Guardian Transport