Stagecoach defends rail privatisation as it raises dividend 10.5pc

The chief executive of Stagecoach, one of the train operators caught up in the West Coast franchise fiasco of 2012, has insisted rail privatisation should not be tampered with just because there was a “procurement failure”.

Martin Griffiths insisted privatisation of Britain’s railways has been a “huge success story” amid growing debate around whether some lines should be taken back into public hands.

Ed Miliband suggested last month that a number of rail franchises could be brought back into public ownership under a Labour Government, in what would be the biggest state intervention by a political party for a generation.

The debate was further stoked on Wednesday when the latest National Rail Passenger Survey showed that the state-owned Directly Operated Railways, which runs the East Coast Main Line, was voted as Britain’s number one long-distance franchised train operator.

Mr Griffiths, whose company runs the West Coast Main Line through a joint business with Virgin Trains, said there were a “number of unanswered questions” about proposals to allow a state-owned operator to bid against the private sector for rail franchises. He queried whether there would be a level playing field between the two.

Stagecoach on Wednesday proposed a final dividend of 6.6p, to be paid on October 1, which will take the full-year pay-out to 9.5p, up 10.5pc, following what analysts described as a “solid” set of full-year results.

Revenue rose 4.5pc to £2.9bn in the year to April 30 while pre-tax profits were almost 2pc ahead at £158m following a strong performance at the transport group’s North American business and its London division.

Stagecoach, which also runs South West and East Midlands trains, is bidding to run the East Coast Main Line, which the Government is seeking to return to private hands by March next year.