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Disposal of New Zealand operations

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21/11/2005

Further to its announcement of 18 November 2005, Stagecoach Group plc (“the Company”) is pleased to announce that it has now agreed unconditional terms for the divestment of all of its New Zealand operations (“Stagecoach NZ”) to Infratil Limited, a company listed on the New Zealand Exchange that is a specialist investor in infrastructure and utility assets. The divestment is expected to complete by 29 November 2005.

Stagecoach NZ operates bus services in the Wellington and Auckland areas of New Zealand, and ferry services in the Auckland area.

The enterprise value agreed for the disposal is NZ$250.5m, to be settled in cash. The cash payable by Infratil will be adjusted to take account of cash retained by Stagecoach NZ. After taking account of this, together with transaction costs and the impact of the Group’s foreign exchange rate hedges, the disposal is expected to result in a reduction in the consolidated net debt of the Company of approximately £95m.

The turnover and operating profit reported in the Company’s consolidated accounts for Stagecoach NZ in the year ended 30 April 2005 were £59.0m and £8.7m respectively, under both UK GAAP and IFRS. The gross assets of Stagecoach NZ as at 30 April 2005 were approximately NZ$308m. The consolidated net gain on disposal is expected to be approximately £20m.

The proceeds of the disposal will initially be used to reduce net debt, and the disposal is not expected to materially impact consolidated earnings per share.

The management team of Stagecoach NZ led by Ross Martin (Executive Chairman) will remain with Stagecoach NZ under its new owner.

Brian Souter, Stagecoach Group plc Chief Executive, commented: “The Group’s New Zealand operations have been tremendously successful under our ownership, delivering excellent financial returns. We received an approach about the possible sale of the business and, after assessing Infratil’s offer and the prospects for the New Zealand operations, we concluded that the disposal was in the best interests of our shareholders. We remain focused on our strategy of maximising shareholder value from the Group’s portfolio of bus and rail businesses through organic growth and we are continuing to explore the potential for complementary acquisitions in the UK and North American bus markets."

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