More on Stagecoach
Stagecoach: Full year trading statement
Stagecoach, the transport company announced that profits (before tax and exceptional items) for the year to April 2005 is expected to “exceed our previous expectations”, but gave little indication of actual figures.
Stagecoach expects to announce its preliminary results on the 22nd of June.
The company says the better results are primarily due to good performance in the rail division. The company’s H1 growth was driven mainly by the bus division, rail was largely flat. The bus business appears to have been hit by fuel prices increases although overall performance seems satisfactory.
The key concern with this stock is fuel prices. The company’s H1 results reflected fuel costs of US$33 per barrel. With current prices around US$50-55, margins next year will be squeezed, despite the company hedging about half next years fuel requirements at a cost of US$43.
The stock trades at 106.5p, on a prospective PE of 14.8x, towards the upper end of the sector range, the yield is 2.9%.
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