UPDATE 3 — Shares of Perth-based transport giant Stagecoach Group rose about 9% on Wednesday after the firm said its founders — Brian Souter and his sister Ann Gloag — will step down at the end of the year in a board overhaul.
Stagecoach is currently focused on bus and tram services after losing out on big UK rail franchises.
Souter and Gloag founded Stagecoach in Perth in 1980, starting out with two buses bought with their father’s redundancy money.
Souter will step down as chairman but continue on the board as a non-executive director from January 1, 2020, but Gloag and Ewan Brown, both long-serving non-executive directors, will retire from the board on December 31, 2019.
Non-executive director Ray O’Toole, who has decades of experience in senior public transport sector roles, will become chairman from January 1, 2020.
“At the age of 65, the time is right for me to step down as Stagecoach chairman to spend time on my other interests and with my family, including my three young grandchildren,” said Souter.
“My family and I continue to have a significant shareholding in Stagecoach and I have every confidence in the management team, our strategy and the positive prospects of the business.
“I look forward to continuing to represent the interests of stakeholders as a non-executive birector on the board.”
Souter and Gloag still own about 25% of Stagecoach, according to Refinitiv Eikon data.
The board changes were announced as Stagecoach reported results for the half-year ended October 26, 2019.
Revenue from continuing operations fell to £800.2 million from a restated £1 billion at the same stage of the previous year “reflecting the end of the Virgin Trains East Coast franchise in June 2018 and the end of the East Midlands Trains franchise in August 2019.”
Stagecoach said its rail operations are now limited to its Sheffield Supertram tram and tram-train operations.
Statutory pre-tax profit was £65.9 million compared with a restated £48.9 million a year earlier.
Stagecoach added: ” … we have no intention to bid for new UK rail contracts on the current risk profile offered by the Department for Transport …
“We continue to pursue our claims against the Secretary of State for Transport regarding his decisions to disqualify us from three rail franchise competitions.
“The High Court is due to hear the three cases in early 2020.”
In its outlook, Stagecoach said: “Looking ahead, as Britain’s biggest bus and coach operator, we have clear opportunities to grow our business and contribute to thriving communities.
“We continue to believe that by working together, the private sector and our local authority partners can deliver the public transport services our customers and communities want.
“Beyond our existing core operations, we have identified opportunities overseas as part of our strategy to diversify the business.”