(Alliance News) - Stagecoach Group PLC on Wednesday said its profit plummeted in the first half of its financial year as Covid-19 restrictions slashed short-term demand for its regional bus and tram services.
Shares in Stagecoach were up 9.8% at 81.20 pence in London in morning trading.
The public transport provider posted a GBP4.5 million pretax profit for the six months ended October 31, a fraction of the previous year's GP65.9 million profit as revenue almost halved to GBP454.6 million from GP800.2 million.
Stagecoach said the result reflected: "The effect of Covid-related restrictions on short-term demand for our regional bus and tram services, in addition to the end of the East Midlands Trains franchise in August 2019."
No interim dividend was declared for the period, Stagecoach having paid out 3.8 pence per share the year prior. The company said it recognised the importance of dividends to shareholders and that it was Stagecoach's ambition to resume dividends "in due course when supported by appropriate profit and cash flow generation, relative to our net debt and pension liabilities".
Stagecoach's outlook for the rest of its financial year ending May 2021 has not changed since its October trading update and it believes its public transport connections are critical to a "green recovery" given the much higher car use in the UK due to Covid-19.
"As we emerge from the pandemic, we anticipate strong support from government in pursuing our shared objective to drive modal shift from car to public transport. That, combined with the evidence of a continuing propensity for travel, further contracts wins in London and the potential for international diversification, leaves us positive on the long-term outlook for the group," said Stagecoach.
Chief Executive Martin Griffiths said: "We welcome the UK, Scottish and Welsh governments' recognition of the importance of bus and tram services, as evidenced by the sector-specific actions they have taken to support the continuation of vital services during the Covid-19 pandemic. We are working closely with our government and sector partners on a new framework to ensure the country's public transport networks adapt to new working and travel patterns, are fit for the post-Covid world, and meet the continuing needs of our customers and communities."
By Anna Farley; annafarley@alliancenews.com
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