Shares of Perth-based train and bus giant Stagecoach rose 5% after it said its 2018 earnings forecast was unchanged despite first-half revenue falling 10% to £1.8 billion due mainly to the expiry of its South West Trains franchise in August.

Pretax profit, on an adjusted basis, fell slightly to £96.7 million in the six months ended October 28.

“We have made positive progress within our UK Rail business and we welcome the new direction for the UK rail network announced recently by the Secretary of State for Transport as part of plans to deliver improved integration between train and track,” said Stagecoach.

“Our franchise term has been extended at East Midlands Trains to March 2019 and Virgin Rail Group is progressing towards agreeing a new Direct Award franchise at Virgin Trains West Coast.

“In addition, we are making good progress in discussions with the Department for Transport on the terms of our Virgin Trains East Coast contract. 

“Work on our shortlisted bid for the new South Eastern franchise is progressing and we are encouraged by indications of an improved risk-reward balance in new franchises.  

“We are also working with SNCF and Virgin on our joint bid for the new West Coast Partnership franchise.

“Our expectation of the level of adjusted earnings per share for the full year to 28 April 2018 is unchanged.”

Stagecoach CEO Martin Griffiths, said: “I am pleased to report half-year financial results in line with our expectation and an interim dividend maintained at 3.8 pence per share.

“We have made positive progress across our businesses. 

“In UK rail, we are working with the Department for Transport towards new contracts at Virgin Trains East Coast and Virgin Trains West Coast. 

“Our East Midlands Trains franchise has been extended through to March 2019, with the prospect of us agreeing a further direct award franchise from March 2019, and we are part of shortlisted bids for new South Eastern and West Coast Partnership franchises.

“In bus, the actions we have taken on pricing, services operated and commercial initiatives across our regional UK bus operations are delivering the results we expected, while our London bus business has had success in winning new contracts. 

“In North America, we have seen improved revenue trends, new contract wins and growth in profit.  

 “We are focussed on making further progress in the second half of the year and have maintained our expectation of full year adjusted earnings per share.”