Stagecoach’s co-founder and longtime chairman, Sir Brian Souter, is to step down at the end of the year but will remain on the board as a non-executive director.
He said the moment was right to spend more time with his family and on his other interests.
The Scottish businessman, who has been a major donor to the Scottish National party, became a billionaire by growing a handful of buses into a multinational company spanning rail and bus routes. He remains a major shareholder in the group.
Souter’s sister and Stagecoach co-founder, Ann Gloag, is also retiring from a non-executive director position on the board on 31 December. Ray O’Toole, a non-executive director, will be appointed as chairman.
Souter has often been a controversial figure, at one point using his wealth to bankroll campaigns in Scotland to try to prevent the repeal of section 28, a measure that aimed to stop any discussion of gay rights in schools.
Souter said: “At the age of 65, the time is right for me to step down to spend time on my other interests and with my family, including my three young grandchildren.
“My family and I continue to have a significant shareholding in Stagecoach and I have every confidence in the management team, our strategy and the positive prospects of the business. I look forward to continuing to represent the interests of stakeholders as a non-executive director on the board.”
Stagecoach has drawn back considerably in the past two years, selling its US bus interests and being ejected from UK railways after decades of running some of the biggest franchises.
The company’s partnership with Virgin Trains on the east coast mainline ended with the route being taken back into public ownership last year, and Stagecoach was later disqualified from bidding for rail franchises after refusing to accept pension liabilities.
Its final rail interest, the west coast mainline Stagecoach ran with Virgin for 22 years, passed to rival First Trenitalia on Sunday.
Stagecoach faces pressures in regional bus operations, where it is the market leader, but may have to compete for urban contracts under new laws allowing mayors to regulate buses.
Stagecoach reported pre-tax profits of £65m for the six months to 26 October, up from £49m last year. Revenues fell by 20% to £800m as its rail contracts came to an end.
Martin Griffiths, the Stagecoach chief executive, said that despite the curtailed size of the group, recent government policy and funding commitments on buses were welcome. “Combined with our own initiatives and our support for the wider UK bus industry strategy, we are well placed to benefit,” he said.
The group’s shares were up more than 5% on Wednesday, with analysts saying it had outperformed expectations. “While there are some signs of progress, with [its] London bus unit outperforming the expectations from the beginning of the year and modest revenue growth in [its] regional bus division, margins at the latter remain under pressure and strategic challenges from potential re-regulation persist,” said Gerald Khoo of Liberum.
