Stagecoach Group PLC (LON:SGC) said it will fight the Department for Transport in the High Court in early 2020 after it was disqualified from bidding for rail franchises.
The bus and rail operator’s shares hit decade lows in April after losing its East Midlands rail franchise after 12 years, with the government also bringing the East Coast line under public control, which the group ran as a joint venture with Virgin.
READ: Stagecoach to take £100mln hit for loss of rail franchises
Stagecoach was also barred by the DfT from bidding for the East Midlands, South Eastern and West Coast lines over its failure to comply with new pension requirements.
The transport operator said on Thursday that its other divisions were performing better, with a “strong performance” in its London bus division, especially in “urban areas and the southern half of the country”.
Regional buses lagged behind with 1% like-for-like sales growth in the twenty weeks ending 14 September, down from 3.2% growth the year before.
Stagecoach blamed the contrast from last year’s hot summer with this summer's poorer weather and rail re-signalling work in the Derby area slashing revenues.
Looking ahead, the group said its priorities were “initiatives to grow revenue over the longer term” including partnerships with airports, festivals and events around the UK.
Shares tumbled almost 10% to 120p at market open but bounced back to 132p during morning trading.