(Sharecast News) - Stagecoach said it would furlough more than half of its regional bus employees after sales plunged to 15% of normal levels in the coronavirus crisis.
The FTSE 250 public transport company said it was cutting weekly vehicle mileage to about 60% of normal levels and slashing capital spending in response to the downturn.
Stagecoach welcomed the government's £167m package of support for the bus industry, announced on Thursday evening. The company said it was waiting to see the details but that the measures reduce the risk of prolonged large losses.
Use of public transport has been severely affected by the government's orders for shops and restaurants to close and for people to work from home and avoid social gatherings. The measures were brought in to curb the spread of the coronavirus from close contact in public places.
Stagecoach said the furlough programme would cover 55% of its regional bus drivers and engineers. The workers affected will be paid 80% of their normal pay or £2,500, whichever is lower, according to the government's support package. Other employees have also been temporarily laid off, Stagecoach said.
"Taking account of the government support confirmed, we do not expect the regional bus business to earn a profit for the time being and for the weeks ahead," Stagecoach said. "Subject to our comments on the challenges of forecasting at this time, we currently expect regional bus to operate at break-even or at a modest operating loss for the time being."
Stagecoach said it had about £506m of cash and committed undrawn bank facilities. Cash capital spending plans will be cut to £40m from £105m and new lease spending will be £20m instead of £38m, the company said.
The company had already announced that no further dividends would be paid for the year to 2 May.
Martin Griffiths, Stagecoach's chief executive, said: "We would like to thank the respective governments and our local authority partners for their support through this very challenging period. It is welcome recognition of the importance of maintaining bus services at this time, and it will enable key workers to continue to travel to and from work, as well as ensuring communities can still access food, medical care and other essential services."
30 Jun 2021 14:09
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