6 Dec 2010

Stagecoach prepares to swoop on smaller operators

Brian Souter is set to further tighten his grip on the UK’s bus market on the back of buoyant trading for Stagecoach, the transport giant he founded 30 years ago.
The Perth group already handles more than 2.5 million passenger journeys on a daily basis through a network which serves more than 100 towns and cities across the country and it recently splashed out £53 million on a return to the London market.
The Sunday Herald understands that directors are now ready to make use of some £260m of unused debt facilities to snap up smaller rivals which could be especially hard hit by Government moves to cut fuel subsidies and reduce payments for concessionary fares.
Brokers at Deutsche Bank believe the group’s underlying pre-tax profits, due to be announced on Tuesday, may have risen approaching 40% to more than £100m in the first six months of the current year.
However, any significant acquisitions would attract the attention of the UK Competition Commission which is already investigating the bus market and will report preliminary findings next month.

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