Stagecoach reports recovery in passenger numbers as earnings slide

(Sharecast News) - Stagecoach reported first-half revenue of £454.6m in its interim results on Wednesday, down from £800.2m year-on-year, as the Covid-19 pandemic had a detrimental impact on passenger numbers.
The FTSE 250 passenger transport operator said its total operating profit from continuing operations came in at £16.1m, falling from £79.6m, while its profit before tax slid to £0.4m from £66.6m a year earlier.

Its earnings per share were 0.1p for the half-year ended 31 October, plunging from 10p in the first half of the 2020 financial year.

The Stagecoach board said the fact that it remained pre-tax profit positively reflected its response to Covid-19, and supportive measures from government and local authorities.

During the period, the company reduced its net debt to £310.8m from £352.1m, with its net debt-to-adjusted 12-month EBITDA ration standing at 1.8x.

The fall in its adjusted earnings per share reflected both the effect of coronavirus, as well as the prior-year expiry of its rail franchises.

Statutory earnings per share totalled 0.8p, down from 9.8p a year earlier.

Stagecoach said it had identified £17m of annualised cost savings since March, and said it still had "substantial" available liquidity, with more than £850m of undrawn committed bank facilities and available cash and deposits.

It was paying nil interim dividend per share, having distributed 3.8p in the first half of the 2020 financial year.

On the operational front, Stagecoach said it had seen a "significant recovery" in patronage and commercial revenue since May in its regional bus division, notwithstanding social distancing and other restrictions throughout the period.

The division was currently operating around 91% of prior-year vehicle mileage, with commercial sales having recovered to almost 60% of prior-year levels and now at around 54%, which the board said reflected some recent tightening of Covid-19 restrictions.

In London bus, the company reported a continuation of strong operating and financial performance, reflecting additional contracts.

"The safety and wellbeing of customers and our people remains our absolute priority as we continue to navigate the Covid-19 pandemic," said chief executive officer Martin Griffiths.

"While the situation remains fluid, we have made progress in the restoration of our networks to close to pre-Covid levels and in growing passenger volumes safely.

"We have a strong business, with good liquidity, devolved operating companies closely focused on our customers and local communities, and a supportive relationship with the government and our local authority partners."

Griffiths said that the company "welcomed" the UK, Scottish and Welsh governments' recognition of the importance of bus and tram services, as evidenced by the sector-specific actions they had taken to support the continuation of vital services during the 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.

"I'm confident that with our strong leadership and committed frontline people we can come through the challenge of the Covid-19 pandemic and maximise the significant opportunities for public transport ahead."

At 0935 GMT, shares in Stagecoach Group were up 7.59% at 79.56p.