THE CO-FOUNDER of Stagecoach Group, Brian Souter, is to move out of the chief executive's office next May, becoming chairman instead.

He will be replaced by Martin Griffiths, who is currently finance director. Ross Paterson, director of finance and company secretary, will become the new finance director, while a new non-executive director will chair the audit committee.

Stagecoach owns the South West Trains and East Midlands Trains franchises and has a 49 per cent stake in Virgin Rail Group. It is also the operator of South Yorkshire Supertram as well as many bus companies in Britain and overseas, including the United States.

Sir Brian said: "I remain committed to the success of Stagecoach and consider now to be an appropriate time to plan to take a step back from the day-to-day management of the business.

“With a combined shareholding of over 25 per cent, my family and I remain committed shareholders in Stagecoach and I will devote whatever time is necessary to effectively discharge my responsibilities as chairman when that time comes."

Meanwhile, Stagecoach said profitability of the group has remained good. An interim management statement revealed like-for-like revenue growth for the 12 weeks to 22 July of 6.8% in its UK rail division, although Virgin Rail Group, which is now set to surrender the West Coast franchise in December, saw revenue growth of just 0.6% over the same period.

In a recent interview, Sir Brian emphasised his belief that excessive regulation hampers growth, when he said: "The best way to protect services and get more people on board is for operators, Government and local transport authorities to work in partnership. That way we can ensure there are the right policies and measures on the ground.

"If we do that, it can make a real difference to our existing customers, help more switch from the car and maximise the wider social and environmental benefit from buses, coaches, trams and trains to our communities. Above all else we need a regulatory framework that gives to transport operators the freedom to innovate."