Our latest Investing Matters Podcast episode with QuotedData's Edward Marten has just been released. Listen here.

Less Ads, More Data, More Tools Register for FREE

Pin to quick picksSGC.L Regulatory News (SGC)

  • There is currently no data for SGC

Watchlists are a member only feature

Login to your account

Alerts are a premium feature

Login to your account

Trading Update

23 Mar 2020 07:00

RNS Number : 1145H
Stagecoach Group PLC
23 March 2020
 

 

 

23 March 2020

Trading update

Trading and COVID-19 impact

Stagecoach Group plc is today (23 March 2020) providing an update on trading, the impact of COVID-19, and the actions it has taken to help guide the business through this period of uncertainty.

Our priority is to protect the health and wellbeing of our people and our customers, while taking action so that the business emerges from this period in as strong a position as possible and well placed for the significant long-term opportunities that we still see for public transport.

We have over £290m of available cash and undrawn, committed bank facilities to underpin the continuity of the business.

Having been on course to deliver our expected adjusted earnings per share for the year ending 2 May 2020, the quickly developing COVID-19 situation means we no longer expect to achieve our previous expectation. Whilst we continue to monitor the situation closely, it is too early to predict reliably the effect on profit. We have taken decisive action, and have contractual protections in place, to help the business withstand this more challenging period. In particular:

· We have a cross-functional working group in place responding to the impact of COVID-19 on our business;

· We have already taken significant measures to reduce our cost base, reduce our capital expenditure and mitigate the effect of a downturn in revenue on our cash flow;

· Based on existing contractual arrangements and discussions with government bodies, we expect to maintain a significant proportion of our revenue during the downturn;

· We have completed a re-financing of our core, bi-lateral bank facilities, entering into £325m of new, bi-lateral bank facilities committed through to March 2025.

We welcome the Government's significant support package for workers and businesses impacted by the current situation, as well as specific measures providing flexibility for public transport operators. We are studying the detail of how these initiatives will apply to our business and be implemented. In addition, we are continuing to engage with government and local authorities on other targeted measures which will protect sector jobs and the long-term health of public transport.

Regional bus

Around 33% of our regional bus revenue is ordinarily receivable from public authorities in respect of concessionary revenue for passengers who receive free or discounted travel, revenue to support socially desirable services and revenue for operating school services. Our ongoing engagement with the authorities includes discussing how that revenue will be protected. Our recent daily data suggests that concessionary patronage is now down around 50% as a consequence of the outbreak of COVID-19.

Commercial revenue from customers directly purchasing tickets for travel ordinarily accounts for approximately 63% of regional bus revenue. Our recent daily data suggests that commercial patronage is now down around 40% as a consequence of the COVID-19 situation.

We are reducing our regional bus mileage to take account of the changes in customer demand. Our services on all days will more closely resemble Sunday services. The result is a reduction in mileage of around 40% and we will continue to review our service levels.

London bus

The London bus business is paid by Transport for London to operate specified bus services and the revenue of the business is not directly affected by short-term changes in passenger numbers.

The COVID-19 situation has adversely affected bus patronage in London. We and the other London bus operators are in discussions with Transport for London about contract changes and mitigating the financial effects on bus operators of any changes.

Rail

In rail, we continue to expect the 2019/20 operating profit from our now-expired, wholly owned rail franchises to more than offset our business development and bidding costs.

Management actions 

We have taken decisive action to reduce our cost base, reduce our capital expenditure and reduce the effect of the revenue downturn on our cash flow. In particular:

· No new business acquisitions are currently being considered;

· No new non-essential capital commitments are being made;

· We are reducing regional bus mileage, as explained above, and are in discussions with other organisations as to how our workforce and vehicle fleet might support the delivery of other services for which there is increased demand;

· Non-essential discretionary spend has been stopped;

· We have frozen all but essential recruitment of new staff;

· Our Directors are sacrificing 50% of their salaries / fees for a period of time, will not receive any bonuses for 2019/20 and will not receive any pay increase for 2020/21;

· Pay negotiations and decisions in respect of other staff will reflect the challenging environment we currently face;

· We are working with industry bodies and other operators, and are in discussions with the relevant authorities about protecting the amounts we receive in respect of concessionary travel, tendered services, school services and Bus Service Operators Grant ("BSOG").

Financial position

Our £400m sterling bond represents the majority of our borrowings, with a term that runs until 2025. In addition, we have recently completed a re-financing of our core, bi-lateral bank facilities. We have entered into £325m of new, bi-lateral bank facilities committed through to March 2025 with the potential for those to be extended by up to two years. The undrawn amounts on those new facilities, together with available surplus cash balances, are approximately £290m.

Dividends

Given the uncertainties caused by the impact of COVID-19, we currently consider it unlikely that we will propose any further dividends in respect of the year ending 2 May 2020.

Preliminary results announcement

We plan to announce our 2019/20 preliminary results on 24 June 2020.

Martin Griffiths, Stagecoach Chief Executive, said: 

"We are all facing an unprecedented challenge at this time and the impact is being felt by our business and employees as with many others.

"Importantly, we have good liquidity and are taking the right, decisive actions to help mitigate as much of the impact of the current situation as we can. We are also working hard with our industry partners, government and local authorities on measures to protect public transport for the long-term.

"Our bus, coach and tram services are hugely important to our country's economy and communities, even more so at this time. I would like to thank our people and other critical sector workers for the important role they are playing in the national effort to get through this difficult period."

Analyst and investor conference call

A conference call for analysts will be held today, 23 March 2020, at 8:00am UK time (9:00am CET). If you would like to participate in this conference call, please email gyeomans@smithfieldgroup.com and Evie.Stpier@smithfieldgroup.com.

For further information, please contact:

Investors and analysts

Ross Paterson, Finance Director 01738 442111

Bruce Dingwall, Group Financial Controller 01738 442111

Media

Steven Stewart, Director of Communications 01738 442111 or 07764 774680

John Kiely, Smithfield Consultants 07785 275665

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation ("MAR"). Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

 

The person responsible for arranging the release of this announcement on behalf of Stagecoach Group plc is Mike Vaux, Company Secretary.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
TSTFLFEEVIIFFII
Date   Source Headline
21st Jun 20224:12 pmRNSNotice of Closure of The Offer
1st Jun 20229:45 amGNWTotal Voting Rights
31st May 202210:02 amRNSForm 8.3 - Stagecoach Group PLC - Amended
31st May 202210:01 amRNSForm 8.3 - Stagecoach Group PLC - Amended
31st May 202210:00 amRNSForm 8.3 - Stagecoach Group PLC - Amended
31st May 20229:58 amRNSForm 8.3 - Stagecoach Group PLC - Amended
31st May 20229:57 amRNSForm 8.3 - Stagecoach Group PLC - Amended
30th May 20222:33 pmRNSForm 8.3 - Stagecoach Group PLC
30th May 202210:15 amGNWDirector/PDMR Shareholding
27th May 20224:49 pmGNWHolding(s) in Company
27th May 20222:32 pmRNSForm 8.3 - Stagecoach Group Plc
27th May 202210:50 amGNWDirector/PDMR Shareholding
27th May 20227:00 amRNSStagecoach London Acquisition
26th May 20223:07 pmGNWAppointment of non-executive directors
26th May 20222:41 pmRNSDELISTING OF STAGECOACH SHARES
26th May 20222:34 pmRNSForm 8.3 - Stagecoach Group PLC
26th May 20229:51 amGNWHolding(s) in Company
25th May 20226:31 pmGNWDirector/PDMR Shareholding
25th May 20223:20 pmGNWHolding(s) in Company
25th May 20222:34 pmRNSForm 8.3 - Stagecoach Group PLC
25th May 20221:44 pmRNSForm 8.5 (EPT/RI)-Replacement of Stagecoach Group
24th May 20222:37 pmRNSForm 8.3 - Stagecoach Group PLC
24th May 20221:56 pmRNSForm 8.3 - Stagecoach Group plc
24th May 20221:48 pmRNSForm 8.3 - National Express Group plc
24th May 20227:06 amGNWTransfer of treasury shares
23rd May 20225:30 pmRNSStagecoach Group
23rd May 20223:52 pmRNSForm 8.3 - STAGECOACH GROUP PLC
23rd May 20223:49 pmRNSForm 8.3 - National Express Group plc
23rd May 20223:31 pmRNSForm 8.3 -National Express Group plc
23rd May 202211:45 amGNWHSBC Bank Plc - Form 8.5 (EPT/RI) - Stagecoach Group plc
23rd May 202211:13 amRNSForm 8.5 (EPT/RI) - Stagecoach Group PLC
23rd May 202211:05 amRNSForm 8.5 (EPT/RI) - Stagecoach Group plc
23rd May 202210:02 amRNSForm 8.5 (EPT/RI)-Replacement of Stagecoach Group
20th May 20226:13 pmRNSAll-Share Combination with Stagecoach now Lapsed
20th May 20225:59 pmRNSOffer Declared Unconditional
20th May 20225:30 pmGNWHolding(s) in Company
20th May 20223:00 pmBUSForm 8.3 - Stagecoach Group plc
20th May 20222:35 pmRNSForm 8.3 - Stagecoach Group PLC
20th May 20222:09 pmEQSForm 8.3 - The Vanguard Group, Inc.: Stagecoach Group plc
20th May 20221:58 pmRNSForm 8.3 - STAGECOACH GROUP PLC
20th May 202212:52 pmRNSForm 8.3 - National Express Group plc
20th May 202212:26 pmRNSForm 8.3 - [Stagecoach Group plc]
20th May 202211:17 amRNSForm 8.5 (EPT/RI) - Stagecoach Group PLC
20th May 202210:51 amGNWHolding(s) in Company
20th May 20229:44 amRNSForm 8.5 (EPT/RI) - Stagecoach Group plc
20th May 20229:00 amRNSForm 8.3 - Stagecoach Group plc
20th May 20227:00 amRNSAcceptance Level Update
19th May 20221:39 pmRNSForm 8.3 - Stagecoach Group plc
19th May 20221:33 pmRNSForm 8.3 - National Express Group plc
19th May 202212:00 pmRNSForm 8.3 - Stagecoach plc

Due to London Stock Exchange licensing terms, we stipulate that you must be a private investor. We apologise for the inconvenience.

To access our Live RNS you must confirm you are a private investor by using the button below.

Login to your account

Don't have an account? Click here to register.

Quickpicks are a member only feature

Login to your account

Don't have an account? Click here to register.