Stagecoach in talks with Government over East Coast Main Line contract

Stagecoach is in talks with the Government over its contract to operate the East Coast Main Line after exceptional charges linked to the loss-making franchise saw profits at the company sink last year.

The train and bus operator said pre-tax profit plunged from £104.4 million to £17.9 million in the year to April 29 after booking an £84.1 million exceptional charge to "provide for anticipated losses" under the East Coast contract, which it jointly runs with Virgin.

Stagecoach was also hit by a £44.8 million non-cash exceptional impairment linked to the Virgin Trains East Coast franchise.

To compound matters, Stagecoach also said that slowing economic growth, the Brexit vote and terrorism have begun to take their toll on the company.

Revenue is not growing as strongly as anticipated as sales are hit by "increased terrorism concerns and political uncertainty", as well as "macroeconomic" factors, the firm said.

The firm said it is taking action across its bus network, including targeted network, pricing and management changes.