Stagecoach hit by terror effect as sales warning is issued

Shares slid 14 per cent on the news with the company saying that travellers have become wary of travelling to big cities following the attacks on Paris.

The tragic events, which led to the loss of 130 lives, appeared to have made would-be passengers far more cautious when choosing whether to travel between hubs by rail and inter-city coach services.

Stagecoach said that revenue growth had slowed since mid-November.

“We believe that revenue has been adversely affected by the terrorist attacks in Paris discouraging people from travelling to major cities,” the company said in an interim update.

The business also reported that growth in its regional UK bus operations had been weaker than expected, reflecting “the effects of government spending pressure” as state spending on transport services has been cut back.

However, Stagecoach predicted that things would improve. “We currently anticipate a recovery in those revenue growth rates,” the FTSE 250 company said.

Martin Griffiths, Stagecoach’s chief executive, said that “challenges remain” in the sector, but that the company “is in good financial shape” to meet them.

“The underlying strength of our business across the UK, continental Europe and North America, means we are well placed,” he said.

The road and rail operator’s total revenues for the six months to the end of October stood at close to £2bn, some 27.5pc higher compared with the same period a year earlier.

The Virgin Trains East Coast franchise was a large contributor to the rise in sales. Pre-tax profits fell by 7.6pc to £90.8m in the six months running to October 31.