STAGECOACH has reported a faster decline in revenues in its UK bus operations, citing weak economic conditions in Scotland and northern England as well as cheaper car travel resulting from lower fuel prices.

And the company, chaired by co-founder Sir Brian Souter, has hammered home its view that traffic congestion is making bus travel in the UK less attractive.

A spokesman noted yesterday that congestion also increased operational costs through greater fuel consumption and the need to put on more buses to cover timetables.

The Perth-based transport company meanwhile flagged continuing challenges for its North American inter-city coach operations, and slower growth in UK rail revenues.

It said yesterday that revenues in its UK bus operations outside London in the 16 weeks to August 20 were down by 1.9 per cent on the same period of last year on a like-for-like basis

In its last financial year to April 30, Stagecoach had recorded a 0.5 per cent year-on-year fall in like-for-like revenues in these bus operations.

Updating the stock market on trading yesterday, Stagecoach said: “Passenger volumes continue to be weaker than we have seen in the UK bus…division in recent years. This is partly attributable to weak underlying local economic conditions in some parts of the UK and sustained lower fuel prices.”

Asked how Stagecoach’s bus business in Scotland was faring, the spokesman replied: “I suppose, generally, the north of the UK, and that includes Scotland, is seeing a weaker economic environment and weaker high street environment than other parts of the country.”

Commenting on the broader UK picture, while also highlighting a switch by consumers to online shopping, the spokesman said: “If you look at the retail offering in high streets in many parts of the country, it is very weak and, of course, that is one of the drivers of people using public transport – whether or not there are attractive things to travel into city centres for.”

Stagecoach emphasised it kept its bus routes under constant review in the face of changing demand, adding that it saw prospects for improving revenue trends later in its current financial year through enhanced marketing and further development of its digital offering.

The company said: “We continually review and adjust our bus networks in response to changing demand. Like-for-like revenue per vehicle mile was 0.5 per cent below the equivalent prior-year period.”

In Stagecoach’s London bus business, revenues in the 16 weeks to August 20 were down by 0.9 per cent on a year earlier on a like-for-like basis. Stagecoach noted a “small net reduction” in contracts with Transport for London, highlighting its strategy of “bidding prudently” and its aim of delivering long-term operating profit margins of more than seven per cent in this business.

The company reported that revenues in its North American business, which includes megabus.com as well as other scheduled, charter, transit and tour bus and coach operations, were in the four months to August 31 down by 3.3 per cent on the same period of last year.

The overall fall was driven by a 10.1 per cent year-on-year tumble in revenues for megabus.com, with this inter-city coach operation weighed down by the effects of sustained lower fuel prices in terms of heightened car and air competition.

Revenues at Stagecoach’s own UK rail division, including the Virgin Trains East Coast franchise of which it owns 90 per cent, were in the 16 weeks to August 20 up by 1.7 per cent on the same period of last year on a like-for-like basis.

The spokesman noted this represented a slowdown in revenue growth in this division, pointing out this was in line with the broader UK rail sector.

Separately, the Virgin Rail Group West Coast franchise, in which Stagecoach has a 49 per cent stake, recorded a year-on-year rise in like-for-like revenues of 4.7 per cent in the 16 weeks to August 20.

Shares in Stagecoach, which employs about 3,000 people in Scotland out of a group-wide workforce of around 40,000, dipped by 2.8p or 1.3 per cent to 207.2p in the wake of the trading statement.

Before the trading update, the consensus forecast among analysts was that Stagecoach would make underlying pre-tax profits of about £180 million in the current financial year to next April.

Stagecoach, which is bidding to retain its major South West Trains franchise in a head-to-head contest with an alliance of FirstGroup and Hong Kong-based MTR (Mass Transit Railway), made underlying pre-tax profits of £187.4m in the year to April 2016.

The company noted independent macroeconomic predictions covered a wide range of possible outcomes and there was therefore a higher-than-usual degree of forecasting uncertainty for Stagecoach.

The spokesman meanwhile noted the potential impact of Brexit in terms of the uncertainty it created for consumers.