Will Investors Hop Aboard Stagecoach Following Wednesday’s Trading Update?
Spreadex | Apr 01, 2019 11:35
Since 2019 began the transport firm has found itself stuck in the same kind of pattern it found itself in throughout 2018. Opening at £1.30, the stock quickly found its way back above £1.50, peaking at £1.68 in early March. Stagecoach Group (LON:SGC) PLC now sits at a current trading price of £1.51.
The big news coming out of December’s interim results was news it was in talks to offload its North American coach business, a division that had been hit by rising fuel and fuel costs, alongside increased competition. These talks came to fruition a couple of weeks later, when Stagecoach confirmed a £271 million sale to Variant Equity Advisors, to be completed at the end of April.
Reflecting the need for that sale was December’s half year figures, where Stagecoach swung to a pre-tax loss of £22.6 million thanks, in part, to a £85.4 million non-cash impairment from its US bus business, alongside a £24.2 million pension charge.
Revenue, meanwhile, plunged from £1.79 billion to £1.23 billion following the loss of the East Coast line and South West Trains rail franchises. However, UK rail profitability actually rose from 2.4% to 3.4%.
It has had some better news recently. December 21st saw it announce a one-year extension to its Virgin Rail Group West Coast rail franchise, while in mid-February it confirmed its East Midlands Trains subsidiary had agreed a new ‘short-term’ rail franchise with the Department for Transport.
In terms of Wednesday’s statement, investors will want to hear the US sale is all set to go through at the end of the month, as well as word on the class-action lawsuit filed against the company (alongside peers First Group and Go-Ahead Group (LON:GOG)) by unhappy commuters.
Stagecoach Group PLC(LON:SGC) has a consensus rating of ‘Buy’ alongside an average target price of £1.63.
Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
Get The App
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved.
Original post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.