National Express: Stagecoach deal is good for costs but does little for growth

Taking over Stagecoach brings some nice cost savings but does not change the long-term growth potential of the business. On recovered profits, the shares may attract income seekers.

Photo by Lachlan Gowen on Unsplash

The privatised UK bus companies were built on the back of many acquisitions. Former managers often bought the bus companies they worked for and then went about hoovering up as many local bus companies as they could until there were around five big players.

Many then went into privatised rail franchises and then overseas bus companies egged on by corporate financiers and shareholders who bought into the growth story. For most of them it has not been a happy story.

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