Haemorrhage London 2

In a previous posting I highlighted the financial losses at TFL. These losses were already happening Pre pandemic and obviously exacerbated these last 10 months.

To add insult to injury there has been an uptick in the share price of Stagecoach Plc which amongst other things run the red buses those iconic to the London landscape. Despite less people using the buses, resulting in falling revenues Stagecoach income under their contract rose. This is because they get paid not on numbers carried but on flow of busses and journey times with arrival times.

Naturally less traffic in town and faster buses resulting in fewer customers but this is a nonsensical contract. Please turn up for work on time, leave on time and do less but earn more. A model recipe for going bust.

Meantime the London traffic suddenly worsened these last two weeks. The road from the west into London shut and all traffic veered down Earls Court Road brought an early gift of grief this Christmas. The night exit is a disaster and with more people abandoning trains expect TFL losses to increase and with the buses not arriving early this quarter the Stagecoach share price to fall again. Profits down 90% and shares rising 10% this week doesn’t make sense and its time to look at fundamentals.

Sell.