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Wednesday, 20 June, 2001, 12:03 GMT 13:03 UK
Train firm thrives, as passengers wait
South West Trains
South West trains: profits up despite "difficult conditions" for passengers
One of the UK's main commuter train firms has seen profits soar, despite admitting passengers have suffered serious disruptions to services.

Operating profits at South West Trains surged 16% to 45.6m in the year to the end of April, a briefing has revealed.

Yet the performance of the operator, which runs trains from London Waterloo to the south coast of England, was "significantly affected" by the disruption which followed October's Hatfield crash, the firm's owner, Stagecoach, admitted.

"Conditions for our customers... have been difficult," Wednesday's statement said.

Passengers throughout Britain suffered delays and cancellations to services over the winter as Railtrack undertook track repairs, and imposed speed restrictions, following the Hatfield crash.

"However, I am pleased to report that at SWT, train operating conditions have improved," Stagecoach chief executive Keith Cochrane said.

"Despite the operating difficulties, continued passenger volume growth has underpinned strong revenue growth, and we are able to report operating profits ahead of last year."

Into the red

But SWT's performance belied a 2.8m loss Stagecoach swallowed through its stake in Virgin Rail Group, which is still suffering the after-effects of the Hatfield crash.

And SWT's profits were unable to save Stagecoach from reporting a 316.5m loss for the year, compared with a 182.3m profits for the year before.

Stagecoach attributed the loss to a 376m reduction of the value it attributes to its American bus operation, Coach USA.

Mr Cochrane admitted the division had continued to underperform since it was purchased, despite the deployment of key Stagecoach staff to oversee reforms.

Benefit from slowdown?

But he predicted the division would show "sustainable profit improvement" as initiatives such as the introduction of sightseeing buses, and a revision of services to Disneyland in California, feed through.

Coach USA may also reap some benefit from the American economic slowdown, which has allowed the firm more easily to fill driver vacancies.

The business blamed low revenue growth last summer on "an acute driver shortage".

At Stagecoach's UK bus operations, which have been hit by industrial action and "continue to operate in a challenging labour environment", operating profits rose 11% to 67.1m.

UK passenger numbers rose 1% overall, with strong growth in cities such as London, Manchester Cambridge and Oxford, but declining trade on rural services.

Overall, Stagecoach reported pre-tax profits of 122.9m excluding exceptional items, such as the Coach USA write down, compared with 244.3m last year.

In the City, Stagecoach shares stood 7.25p higher at 71.25p in lunchtime trade on Wednesday.

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