Stagecoach shares down after bus profits warning
Shares in transport operator Stagecoach fell by more than 7% in early trading after it warned of lower profits from its regional UK bus operations and US business this year.
The Perth-based firm said it believed its share of Virgin Rail operations should help make up the shortfall.
However by mid-morning, its shares had slumped by 29.3p to 378.1p.
The group said its performance in recent weeks from bus routes outside London had been worse than expected.
It has revised down expected divisional operating profits for the financial year ending April 2015.
The group reported overall pre-tax profits of £98.3m for the six months to the end of October, slightly lower than the same period last year. Revenues rose 4.8% to £1.54bn.
Last month a joint venture between Stagecoach and Virgin won the franchise to run the East Coast mainline rail route.
The consortium, named Inter City Railways, will take over the franchise on 1 March but it is not expected to impact on Stagecoach profits until the 2015/16 financial year.
Stagecoach and Virgin already operate rail services on the West Coast main line.
Chief executive Martin Griffiths said the company was "in excellent financial shape".
But the group added: "In light of trading trends in recent weeks, we have changed our view of the likely divisional mix of profit.
"We are lowering our expectations of 2014/15 operating profit from our regional UK Bus and North America businesses but this is broadly offset by other areas, including the share of profit we expect from Virgin Rail Group."