Stagecoach sees revenues slide, but stays upbeat for current year

The bus, coach and tram operator reported revenues from continuing operations of £928.2m in the year to 1 May 2021, compared to £1.4bn a year previously. Adjusted total operating profits were £48.1m, down on 2020’s £119.7m.

Statutory pre-tax profits, which included government support, came in at £24.7m compared to £40.6m in 2020. Stagecoach said its profitability reflected both “decisive action” taken by management in response to the pandemic and government payments to ensure the continuation of public transport services.

Transport companies were hit hard by the pandemic, as lockdown measures kept people at home and out of offices, causing passenger numbers to slump.

Stagecoach, the UK’s biggest bus and coach operator, said: “The marked reduction in revenue and operating profit reflects the adverse situation on the performance of the regional bus operations since March 2020.”

Looking ahead, however, the firm added that it was encouraged by the progress made on the roadmap out of Covid-19 restrictions, and that regional bus vehicle mileage was now around 94% of pre-Covid levels. It has also restarted its coach networks.

Martin Griffiths, chief executive, added: “We continue to make good progress in delivering our immediate priorities.

“We are confident that there is a strong and positive future for public transport as we carefully follow the roadmap out of the Covid-19 pandemic. While it is difficult to reliably forecast the pace of recovery from the pandemic, we continue to see good long-term prospects f0r the business.

“The new National Bus Strategy for England, and other recent commitments by the Scottish and Welsh governments, provide a huge opportunity to fundamentally transform travel.

“Looking ahead, we see a positive outlook as our bus, coach and tram services play a critical role in tackling climate change, delivering economic recovery and ensuring healthier and more connected communities.”

Gerald Khoo, analyst at Liberum, said: “The fall in profits reflected the impact on travel demand form the pandemic, which fell on the regional bus division. Profits at London bus rose, with revenue derived from contracts with Transport for London that have no link to passenger volumes.

“London bus continue to trade largely normally. Regional bus commercial passenger revenue is now at 68% of pre-pandemic levels. We believe this points towards a reassuring recovery trend, with Covid restrictions yet to be lifted fully.

“Management’s long-term optimism is underpinned by the National Bus Strategy, which aims to support modal shift from private cars to buses.”