Travel operator Stagecoach (LON:SGC) slashed its dividend for the full year to April, sending shares down over 7 percent at market open on Thursday.
The full year dividend fell to 7.7 pence per share, down from 11.9 pence the year previously. The group cited the £86 million hit it had taken from the disastrous East Coast rail franchise, which was a joint venture held with Virgin Trains. The government announced it would be stripping the companies of the franchise earlier this year after the operators “got their bid wrong”.
For the full year adjusted pre-tax profit fell 4.1 percent to £144.8 million, down from from £151 million a year ago, with revenue dropping 18.1 percent to £2.23 billion.
Stagecoach CEO Martin Griffiths commented on the costs of the East Coast venture:
“I am disappointed to be reporting significant exceptional costs in respect of Virgin Trains East Coast but I am pleased that there is now clarity for both customers and shareholders.
“We have made significant progress elsewhere in our rail portfolio and continue to see value and opportunities.”
Shares in Stagecoach (LON:SGC) are currently trading down 7.08 percent at 124.60 (0846GMT).