THE majority stakeholder in York-headquartered Virgin Trains East Coast has revealed it expects the rail route’s operations to deliver “significant profits” in its next financial year.

Stagecoach, which forms part of the InterCityRailways consortium alongside Virgin, said it was pleased so far with progress of the East Coast mainline operations after being awarded the franchise earlier this year.

Branded as Virgin Trains East Coast, the consortium is 90 per cent owned by Stagecoach, which yesterday said the franchise is expected to make a “significant operating profit contribution” to the group’s financial year ending April 30, 2016.

In a pre-close trading update, Stagecoach said profits from Virgin Trains East Coast will reflect its planned programmed of investment to “grow the business by transforming the customer experience”. However, it said it is likely to see additional finance costs in relation to pensions and bonding arrangements.

Virgin Trains East Coast took over the York-headquartered franchise on March 1 after being awarded the London to Edinburgh route last November.

Prior to formally taking over the franchise, Stagecoach and Virgin revealed the operation’s headquarters were to remain in York, which has been the home of the operation since before the Second World War.

As well as a promise to keep the operational offices, currently employing almost 200 people in Skeldergate, within York, the company has confirmed its commitment to open a new rail academy in the city from 2016, as well as investing £140m in the eight-year life span of the franchise.

Overall, Stagecoach said its UK rail division has seen a nine per cent like-for-like revenue growth for the financial year to date.