Stagecoach: ‘Confidence in public transport growing’

STAGECOACH has signalled a “growing confidence to return to public transport” with passenger numbers at 70 per cent of pre-pandemic levels at the end of last month after the return of schools and universities.

The Perth-based transport giant said vehicle mileage was at around 94% of 2019 levels in a trading update for financial year ending April 30, 2022.

The business said it will continue to receive Covid-19 support until March next year, and it also said that discussions for a proposed merger with National Express are ongoing.

The firm’s shares rose nearly 30% last month after it confirmed the potential merger with fellow transport provider with the announcement that talks had opened “in relation to a possible all-share combination”.

Stagecoach said in its latest update: “Discussions between the parties and reciprocal customary due diligence remain ongoing and there can be no certainty that any offer will be made.”

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The firm said that for the week ended October 2, journey numbers were 70.1% of the figure for the equivalent period in 2019, fare paying journey numbers were 74.4% and concessionary journey numbers were 60.2%.

Commercial sales as a percentage of the 2019 levels are higher than fare paying journey numbers, which is partly attributable to travel patterns during this Covid-19 recovery period, with single tickets representing a higher proportion of sales than in 2019, while weekly and monthly tickets represent a lower proportion, Stagecoach said.

“We continue to progress a number of ticketing initiatives to reflect the changes we are seeing in travel patterns,” it added.

READ MORE: Shares in Scottish bus giant Stagecoach soar as investors like look of National Express deal

Along with other UK transport businesses, the firm was reliant on government support and while the Bus Services Support Grant Restart for local bus services in England, excluding London, came to an end at the end of August, the Department for Transport has put in place a £226.5m Bus Recovery Grant funding package to cover the period to March 15, 2022.

“We, and other bus operators, continue to work closely with the Department for Transport on the terms and conditions of the scheme, whereby funding is allocated to operators with reference to revenues and mileage operated,” Stagecoach said. “In Scotland, the Covid-19 Support Grant Restart payments for continuing bus services have now been extended through until March 31, 2022.”

HeraldScotland: Source: London Stock Exchange.Source: London Stock Exchange.

Stagecoach added: “We are continuing to seek new opportunities to diversify and grow the business.”

It successfully retained the rail replacement contract for London North Eastern Railway following a competitive tender, and “continues to actively pursue other UK rail replacement bids”.

Stagecoach’s Sheffield Supertram business is also receiving government payments for continuing essential tram services. The Light Rail Revenue Restart Grant scheme ended in July, and has been replaced by a £56m funding package to light rail operators that runs from running until next April.

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Separately, Stagecoach workers earlier voted to strike in a dispute over pay and conditions, Unite Scotland said.

Martin Griffiths, Stagecoach group chief executive, said: “The momentum in passenger journeys and sales reflects a pick-up in activity and travel across the UK, and growing confidence to return to public transport.

“While there remains some uncertainty around how the recovery continues, our outlook for the year ending April 30, 2022 is unchanged from when we announced our full year results in June 2021.

“Strong partnership working between bus operators, national government and local transport authorities is fundamental to transforming the country’s bus networks and tackling climate change.”

Stagecoach shares closed down 1.1p, or 1.3%, at 81.85p.

The Herald Scotland

The Herald Scotland

The Herald is a Scottish broadsheet newspaper founded in 1783. The Herald is the longest running national newspaper in the world and is the eighth oldest daily paper in the world. The title was simplified from The Glasgow Herald in 1992