Sterling slides as election polls tighten, and Stagecoach on a new leg of its corporate journey
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“Polling, which suggests a hung parliament is still a credible outcome after Thursday’s UK General Election, saw falls for sterling and UK-focused stocks as markets reacted to the threat of renewed uncertainty.

“The multi-national FTSE 100 trades higher but the more domestic FTSE 250 is under pressure as investors nervously await the results of the big vote,” says AJ Bell Investment Director Russ Mould.

Stagecoach

“Transport operator Stagecoach is on a new leg of its corporate journey as brother and sister founders of the business Brian Souter and Ann Gloag step off.

“This will still be a family affair; Souter, while no longer chairman, will remain a non-executive director and the family retains a significant shareholding in the business.

“The results which accompanied these board changes, as expected, revealed a significant drop in revenue reflecting the sale of its North American business and the loss of its rail franchises.

“While this has made for a simpler business, it also means the company’s fortunes are almost entirely tied to its UK bus operations.

“With the outcome of Thursday’s election still uncertain, and the threat of increased regulation whoever prevails, Stagecoach could be navigating an increasingly bumpy road.

“The company’s large regional bus operations were already stalling and to stave off regulatory pressure the company could have to invest further in service improvements, putting pressure on profit and cash flow.

“This includes putting money into things like greener vehicles, autonomous technology, contactless payments and app-based ticketing.

“Clearly diversification is also a priority and the company notes it is a shortlisted bidder for the operation of a rail system in Sweden.

“The fact it has been disqualified from bidding on three rail franchises in the UK is not a great calling card – though it continues to fight this decision in the courts.”

These articles are for information purposes only and are not a personal recommendation or advice.

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The daily market update is written by Russ Mould, AJ Bell’s Investment Director and his team. The article highlights the movement in the main index, winners and losers on the day and any macro-economic announcements.