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Stagecoach cuts dividend, hit by East Coast rail costs

LONDON, June 28 (Reuters) - British transport company Stagecoach cut its dividend after annual profits fell, and the company took an 85.6 million pound ($112 million) hit from the failure of the East Coast rail contract.

Stagecoach, which also runs bus services, posted adjusted pretax profit of 144.8 million pounds for the year ended April 28, down from the 151.0 million pounds it made in the prior period, and said it would cut its dividend.

The full-year pay-out was cut to 7.7 pence per share, down from 11.9 pence per share, meaning it will more than halve its proposed final dividend per share.

“The Board...feels the dividend needs to be set at a level from which it can grow over time as well as being covered by normalised non-rail cash flows,” Chief Executive Martin Griffiths said in a statement on Thursday. ($1 = 0.7642 pounds) (Reporting by Sarah Young, Editing by Paul Sandle)

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