Stagecoach drives profits up

Stagecoach has sold its US operation

Transport group Stagecoach has reported a 6% increase in annual profits.

The improvement, which was well ahead of analysts' expectations, was driven by better performance at its core UK bus and rail businesses.

Stagecoach has had a tough time since buying Coach USA, the biggest provider of charter and sightseeing services in the United States, in 1999.

The unit has been hit by a slowdown in consumer spending since the 11 September terrorist attacks - and it came as a relief to investors when Stagecoach started to sell off the business earlier this year.

Shares bounce back

Stagecoach reported pre-tax profits for the year to 30 April of £113m, on slightly reduced turnover of £2,077m.

Analyst forecasts had ranged from £100m to £110m.

"The group has started the year well and is trading in line with our expectations," chief executive Brian Souter said in a statement.

Stagecoach shares have bounced back from a November 2002 low of around 10p.

They closed at 56.75p on Tuesday, valuing the business at around £754m.