Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Stagecoach bolstered by govt support as outlook remains uncertain

Published 22/07/2020, 07:32
Updated 22/07/2020, 09:25
© Reuters. FILE PHOTO: The spread of the coronavirus disease (COVID-19) in South Shields

© Reuters. FILE PHOTO: The spread of the coronavirus disease (COVID-19) in South Shields

By Sarah Young

LONDON (Reuters) - Britain's Stagecoach (L:SGC) expects government support for bus services to help its bottom line this year but said it was unable to make a profit forecast because of the continuing impact of the coronavirus on demand for public transport.

Since March government funding has helped bus operators to maintain services despite user numbers plunging because of advice to avoid public transport during lockdown.

That funding is set to continue to the end of October and Stagecoach, the UK's biggest bus and coach operator, said that talks have already begun about support for another 12 weeks after that.

"They're not funding us to make significant profits, but there's a recognition from government that if they want certain levels of service to operate, then the costs need to be covered," Finance Director Ross Paterson said in an interview on Wednesday.

The government on Friday changed its guidance on public transport, saying that people may now use it and Stagecoach Chief Executive Martin Griffiths said he was optimistic and numbers were rising.

"Every single day we're seeing more and more people coming back to public transport," he told Reuters.

Passenger numbers are now at about 40% of last year's level, up from about 10% at the height of lockdown, said Stagecoach, which is now running about 80% of its services.

Shares in Stagecoach, which had lost two thirds of their value since the beginning of the year, were up 8% at 54 pence.

The impact of the COVID-19 lockdown hit Stagecoach's results for the 12 months to May 2, as did the ending of two rail contracts in Britain and the sale of its North American unit, meaning that adjusted earnings per share fell 39% to 13.5 pence.

Stagecoach said it was hard to forecast the outcome for the current financial year but government support should help it to generate positive core earnings in the short term.

© Reuters. FILE PHOTO: The spread of the coronavirus disease (COVID-19) in South Shields

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.