Stagecoach tells City to update forecasts

IF passengers on the commuter trail into Waterloo have been surprised by improvements in the service offered by South West Trains it is nothing to that felt by City analysts today, who were told in no uncertain terms by SWT's much-maligned parent group Stagecoach to upgrade their profit forecasts.

City scribblers worried about the increasing intervention of the Department of Transport in the running of the railways and fears that 'excess profits' could be curtailed, had been cutting back their expectations on the performance of Stagecoach's rail businesses.

The group, however, said that rather than the forecast £3m fall in profits at SWT, the earnings will in fact 'be no less than the prior year reported profit of £44.1 million' in the year to 30 April.

There were also fears that the tight management contracts imposed on Stagecoach's Virgin Rail joint ventures would sharply cut last year's £13m share from the operations out of Euston and on the intercity CrossCountry network.

Stagecoach, however, said its 49% share of Virgin Rail profits are now likely to come in at £10.2m, as much as £8m more than consensus forecasts.

At SWT, the group said: 'Following the introduction of the new timetable on 12 December passengers have benefited from more frequent departures from the busiest stations and a further significant improvement in train punctuality.'