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Shares in Stagecoach Group dropped 14 per cent on Wednesday after the transport giant revised down its full-year profit expectations.

The Perth-based group said revenues for the six months to October 31 are up 28 per cent on the same period last year to £1.97 billion and first-half profits are up almost 12 per cent to £121.5 million.

However a £23.3 million exceptional charge on refinancing debt bonds pushed first-half pre-tax profits down eight per cent on a reported basis to £90.8 million.

Stagecoach said revenue growth stalled in early November parts of its rail and inter-city coach operations in the UK and continental Europe, which it believes were “adversely affected by the terrorist attacks in Paris discouraging people from travelling to major cities”.

The group also notes “softer than expected revenue” at a number of its regional UK Bus businesses, which together has forced a “modest” revision downward of adjusted earnings per share for the year ending 30 April 2016.

However the group said it expects growth rates to recover.

Chief Executive, Martin Griffiths said: “Challenges remain in our sector in the short-term but the underlying strength of our businesses across the UK, continental Europe and North America, means we are well placed to drive value for our customers and investors.”

Stagecoach notes UK rail revenues for the six months to October 31 rose by 63 per cent on the prior year to £1.08 billion (H1 2014: £664.3 million).

The increase in rail revenue was largely from the contribution from Virgin Trains East Coast, which began operating the East Coast rail franchise in March 2015 and in which the Group has a 90 per cent interest.

Revenue from the UK regional bus division rose 0.7 per cent to £530.8 million.

The North America business saw US dollar revenues dip 6.6 per cent on a constant currency basis to $349.2 million (H1 2014: $373.9 million).

The London bus division saw revenues rise 1.4 per cent year-on-year to £133.1 million.

Chief Executive, Martin Griffiths said: "These are a good set of results with overall earnings per share in line with expectations.

“We have continued to invest in making travel better and easier for our customers. Public transport is a shared responsibility between the public and private sectors.

“It is crucial that the investment of transport operators is matched by steps by the public sector to tackle the growing challenge of road congestion, which is holding back the potential of the bus.

“At the same time, shrinking public investment in local transport can impact on the cost of travel and the network of services.

“We look for efficiencies within our own businesses to protect our customers as far as we can from any impact of Government cuts.”

He added: “Our rail businesses have demonstrated the benefits of a commercially-led approach, with passenger revenue growth and ongoing investment in improved facilities and better information for customers.

“We are working closely with Government and Network Rail to deliver new trains, greater capacity and more train services.”