FEATURES

Stagecoach South West posts largest losses in sector despite greatest growth in journey numbers

Lowest year on year revenue rise compounded by above average staffing costs increase as £2 bus fare cap continues to prop up passenger demand.

Peter Cleasby

Exeter-based Stagecoach Devon Ltd, which trades as Stagecoach South West, has posted a six-fold increase in operating losses for the year ending April 2023. Its financial results, published this month, show a £6.83 million pre-tax loss on operations compared with a loss of £966,000 during the previous year.

The company is part of Stagecoach Group Limited, which operates bus services through a network of area-branded service divisions and subsidiary companies. It is one of a sector of fourteen Stagecoach Group subsidiary companies covering England outside London, where different regulatory and financial regimes apply to bus services, as they do under the devolved governments.

The group has been privately-owned by DWS Infrastructure, a Germany-based investment and asset management business, since May 2022. Previously, the former Stagecoach Group plc traded its shares on the London Stock Exchange.

Stagecoach Group subsidiary companies trade under brand names that differ from their registered names, with brand name geographies often applying to more than one individual company operating area. Accounts are published at subsidiary company level, as well as for the group as a whole. Those for 2022-23 were finalised for all subsidiaries simultaneously at the end of January.

Six of the subsidiary companies made pre-tax profits, with three reporting profit increases over the previous financial year and three profit reductions. Of the other eight loss-reporting companies, two showed improved performance by reducing losses compared to the previous year.

Stagecoach Devon’s 2022-23 losses contrast with pre-tax profits of £11.39 million made by Greater Manchester Buses (South), the largest Stagecoach operating company serving Manchester.

Stagecoach subsidiary operating companies 2022-23 pre-tax profits bar chart Stagecoach subsidiary operating companies 2022-23 pre-tax profits. Sources: company annual reports and accounts (England only, excluding London).

We asked Stagecoach Devon to explain the company’s performance. It provided a statement which emphasised post-pandemic challenges, inflationary pressures, staffing costs and the service enhancements made possible by public funding under Devon County Council’s Bus Service Improvement Plan.

It did not explain why Stagecoach Devon’s plunge further into the red was so much greater than any of its peers, which have also had to cope with changes in travelling habits, inflation-driven costs increases and limited government funding awards.

Stagecoach Devon’s income from fares and contracts rose to £51.33 million in 2022-23 from £47.84 million in the previous year, an increase of 7.3%. This was the smallest percentage increase in the sector and less than half the 15.4% average increase across all the subsidiary companies.

At the same time the number of passenger journeys at Stagecoach Devon rose by more than 48%, the biggest increase in the sector, from an average of 62,000 to an average of 92,000 a day.

This growth also set the bar for the joint highest rise in actual average daily passenger journey numbers in the sector, equalled only by Greater Manchester Buses (South).

Stagecoach subsidiary operating companies 2022-23 average passengers per day increases vs 2021-22 bar chart Stagecoach subsidiary operating companies 2022-23 average passengers per day increases vs 2021-22. Sources: company annual reports and accounts (England only, excluding London).

The Manchester company operates in a different context and at a different scale to Stagecoach Devon. One serves a densely-populated metropolitan area with 683 buses, the other a mixed rural and urban area with 314 buses.

Stagecoach (North West) Ltd, operating as Stagecoach Cumbria and North Lancashire, is instead a company with similar characteristics to Stagecoach Devon.

It serves a similarly-mixed rural and urban area, runs a similarly-sized fleet and is similarly located in England’s periphery, serving coastal areas and affected by holiday and summer seasonal demand.

Stagecoach Devon Ltd vs Stagecoach (North West) Ltd Stagecoach Devon Ltd vs Stagecoach (North West) Ltd. Sources: company annual reports and accounts (except * calculated from available data).

Apart from profitability the two most significant differences between the two companies are proportional increases in staffing costs and revenue from fares and contracts.

Stagecoach Devon increased its staff spending by above the sector average of 8.3% and Stagecoach North West by below it. At the same time Stagecoach Devon’s fares and contracts revenue increased by below the sector average of 17.3% and Stagecoach North West’s by above it.

In its statement, Stagecoach Devon said the primary driver of its 11.8% staff spending increase was “investing in our proposition for our colleagues” which it said referred to “staff packages including uniform, holiday allowance, well-being, background technology etc”.

It added that this “ensured that we remained market competitive and recognised the hard work and effort that goes into running a reliable bus service”.

Stagecoach subsidiary operating companies 2022-23 revenue increases vs 2021-22 Stagecoach subsidiary operating companies 2022-23 revenue increases vs 2021-22. Sources: company annual reports and accounts (England only, excluding London).

The implications of Stagecoach Devon’s 2022-23 financial performance for its future, and for the future of the services it operates, are unlikely to be serious in the short-term. The company’s financial statements say:

“The directors have received confirmation from Stagecoach Group Limited, the company’s intermediate parent company, that Stagecoach Group Limited intends to provide financial support to the company, to assist the company in meeting its liabilities as and when they fall due, to the extent that resources are not otherwise available to the company to meet such liabilities.”

They add, as per standard reporting practice, that: “The directors cannot be absolutely certain that Stagecoach Group Limited will provide the company with financial support if required but, having taken account of Stagecoach Group Limited’s current intention, Stagecoach Group Limited’s past practice, recent trading performance, and increased and uncertain cost inflation, the directors have a reasonable expectation that the company will continue to operate as a going concern for a period of twelve months from the date of approval of these financial statements.”

The annual reports of the other subsidiary companies contain identical wording, so there is no suggestion that Stagecoach Devon is particularly precarious compared with its peers. They do, however, serve as a warning that the Stagecoach Group board will expect action to be taken to reduce or eliminate trading losses.

Subscribe to The Exeter Digest - Exeter Observer's essential free email newsletter

Your personal information will be processed and stored in accordance with our Privacy Policy

Stagecoach Group’s 2023-24 half year results, published on 6 December, show revenue growth of 15.1% from its UK bus operations (excluding London) to £584.7 million in the six months to 28 October last year, compared with the same period the previous year.

They also show 5.3% growth in passenger journeys over the same period, partly attributed to “supportive government policy” in England in the form of the £2 bus fare cap.

Stagecoach Devon’s managing director, Peter Knight, told Devon County Council’s October Bus Users and Stakeholders Forum that the fare cap had driven a 3% increase in passenger journeys during its first nine months of operation.

It remains to be seen whether bus companies will be able to persuade people to continue using buses after the £2 cap ends on 31 December this year.

The Stagecoach Devon statement ended by saying: “We also recognise that we are more than just a bus service, we’re a driving force for community connection, sustainability and positive change in the longer term”.

Hopefully these sentiments, which accord with owner DWS Infrastructure’s stated corporate philosophy, will persist when doubts surface about Stagecoach Devon’s viability in future.


Democracy doesn't work when people don't know who is deciding what on whose behalf and what the costs and consequences of those decisions will be.

Exeter Observer is proving that reader-funded media can deliver the independent public interest journalism our local democracy needs.

Upgrade to a paid Exeter Observer subscription to support our work and get access to exclusive premium content and more.

More stories
South West peninsula 2025 spending review road and rail investment map

Dawlish rail resilience, Exeter A379 bridge renewal and Cullompton M5 J28 schemes all shelved after spending review

Government road and rail funding announcement billed as “the biggest boost to England's transport infrastructure in a generation” largely passes Devon and Cornwall by while leaving final phase of South West Rail Resilience Programme undelivered.

South West peninsula 2025 spending review road and rail investment map

Dawlish rail resilience, Exeter A379 bridge renewal and Cullompton M5 J28 schemes all shelved after spending review

Government road and rail funding announcement billed as “the biggest boost to England's transport infrastructure in a generation” largely passes Devon and Cornwall by while leaving final phase of South West Rail Resilience Programme undelivered.

Illustrative floor plan of new redevelopment proposals

New Heavitree Road police station student accommodation and “co-living” complex proposals submitted to Exeter City council

Application for full planning permission for 813-room scheme in seven blocks follows decision to reject previously-proposed 955-room scheme in two blocks which was subsequently upheld at appeal.

Change in bus passenger journey numbers 2019-20 to 2023-24 by England local transport area bar chart

National Audit Office finds decline in Devon bus passenger journey numbers among largest in country

Devon journeys down 28% – seventh from bottom across 85 areas – while journeys in Cornwall increased by more than 40%.

Danny Barnes

Danny Barnes received full £15,000 Devon County Council allowance during 2024-25

Heavitree & Whipton Barton councillor failed to sign off £14,600 community grants after attending only two of fifteen public meetings and is alleged to have worked for Scottish Labour MP Imogen Walker since shortly after last year’s general elections.

, updated

Exeter cycle route E9 Wonford Road bus gate modal filter

Wonford Road modal filter bus gate to be first of five Exeter ANPR camera sites

Devon County Council will use new moving traffic offence enforcement powers to issue penalty charge notices to motorists contravening active travel, bus lane and one-way street restrictions.

On Our Radar
Summer at the Quayside illustration

TUESDAY 29 JULY TO FRIDAY 29 AUGUST 2025

Summer at the Quayside

A month of free family activities including weaving, felting, doodling and drumming.

EXETER QUAY

Spork! summer special

THURSDAY 31 JULY TO THURSDAY 14 AUGUST 2025

Theatre in the Park

Exeter Phoenix hosts an al fresco summer theatre season featuring Shakespeare, spoken-word poetry, puppetry and physical comedy.

ROUGEMONT GARDENS

Three Acres And A Cow production still

SATURDAY 2 AUGUST 2025

Three Acres And A Cow

A history of land rights and protest in England told in folk song, story and poetry.

SIDWELL STREET METHODIST CHURCH