LONDON (Reuters) - Britain’s Stagecoach expects government support for bus services to help its bottom line this year but said it was unable to make a profit forecast because of the continuing impact of the coronavirus on demand for public transport.
Since March government funding has helped bus operators to maintain services despite user numbers plunging because of advice to avoid public transport during lockdown.
That funding is set to continue to the end of October and Stagecoach, the UK’s biggest bus and coach operator, said that talks have already begun about support for another 12 weeks after that.
“They’re not funding us to make significant profits, but there’s a recognition from government that if they want certain levels of service to operate, then the costs need to be covered,” Finance Director Ross Paterson said in an interview on Wednesday.
The government on Friday changed its guidance on public transport, saying that people may now use it and Stagecoach Chief Executive Martin Griffiths said he was optimistic and numbers were rising.
“Every single day we’re seeing more and more people coming back to public transport,” he told Reuters.
Passenger numbers are now at about 40% of last year’s level, up from about 10% at the height of lockdown, said Stagecoach, which is now running about 80% of its services.
Shares in Stagecoach, which had lost two thirds of their value since the beginning of the year, were up 8% at 54 pence.
The impact of the COVID-19 lockdown hit Stagecoach’s results for the 12 months to May 2, as did the ending of two rail contracts in Britain and the sale of its North American unit, meaning that adjusted earnings per share fell 39% to 13.5 pence.
Stagecoach said it was hard to forecast the outcome for the current financial year but government support should help it to generate positive core earnings in the short term.
Reporting by Sarah Young; Editing by David Goodman