StockMarketWire.com - Bus and coach operator group Stagecoach slashed its dividend Thursday as adjusted annual pre-tax profit and revenue slipped and the company reported an £85.6m increase in expenses after the company lost a key franchise earlier this year.

For the 12 months to 28 April, adjusted pre-tax profit fell 4.1% to £144.8m, from £151.0m a year ago, revenue slipped 18.1% to £2.23bn, operating profit fell to £179.9m from £185.1m.

The company blamed the slip in revenue growth on the end of its South West trains franchise in August 2017.

While company managed to reduce annual net debt to £395.8m from £409.4m a year ago, its efforts were held back by £85.6 hit from expenses as it prepares to transfer its Virgin Trains East Cost Business.

The loss of its Virgin Trains East Coast Business comes after the Secretary of State for Transport's decided to appoint an Operator of Last Resort to take over the operation of InterCity East Coast train services from the company's Virgin Trains East Coast business. 'We expect cash outflows in the year to 27 April 2019 in respect of the transfer of the East Coast rail business, further cash outflows in respect of the unwind of the expired South West Trains rail franchise and the reversal of cash flow timing benefits at East Midlands Trains,' the company said. The company also said it would be moderating spending in its bus divisions following several years of significant fleet and technology expenditure.

The full year dividend was slashed to 7.7p per share from 11.9p a year earlier.

Story provided by StockMarketWire.com