Analysts said the group was sitting at “a fork in the road” as bosses revealed that annual revenues and profits had been hit hard by the pandemic.
While Stagecoach remained in the black with an adjusted pre-tax profit of £17 million for the year to May 1, that was well down on the £90.9m generated a year earlier – a period that was largely unaffected by the coronavirus crisis. Full-year revenues reversed to £928.2m from more than £1.4 billion in 2020.
The firm noted that patronage and commercial revenues were on an “improving path”, underpinned by “supportive” government measures in Scotland, England and Wales. It expects to benefit from more staycationers making leisure trips.
Commercial sales are now at around 68 per cent of the equivalent period in 2019, compared to a pandemic low of just 12 per cent. Vehicle mileage, meanwhile, has been restored to about 94 per cent of pre-Covid levels.
The group said a new long-term sustainability strategy had been finalised, with a zero emissions UK bus fleet targeted by 2035. It is already a key partner in the UK’s first all-electric bus city initiative in Coventry.
As of June 28, the group had more than £875m of available liquidity though shareholders will not be getting a dividend for the past year “given the continuing uncertainties caused by the impact of Covid-19”.
Group chief executive Martin Griffiths said there was a positive future for public transport as the recovery gains traction but warned of a “few bumps along the way”.
“While it is difficult to reliably forecast the pace of recovery… we continue to see good long-term prospects for the business,” he said.
“The new national bus strategy for England, and other recent commitments by the Scottish and Welsh governments, provide a huge opportunity to fundamentally transform travel in our communities. There is significant potential to deliver healthier and more prosperous places by moving away from towns and cities built around cars to prioritising easy-to-use sustainable public transport and active travel.
“We are proud to have finalised our new long-term sustainability strategy and to be a partner in the UK’s first all-electric bus city in Coventry. Our sustainability strategy is a critical part of the overall strategy for our business, setting out our vision through to 2035.”
He added: “Looking ahead, we see a positive outlook as our bus, coach and tram services play a critical role in tackling climate change, delivering economic recovery, and ensuring healthier and more connected communities.”
Ben Nuttall, senior analyst at Third Bridge, said the transport operator was sitting at a fork in the road.
“Stagecoach is now beholden to a new set of circumstances beyond their control such as public confidence, hybrid working patterns and the vaccine rollout,” he noted.
“Rail journeys are more driven by people heading to work, whereas bus journeys are driven by leisure activities. This implies hybrid working patterns are more likely to have a long-term impact on trains rather than buses.
“Preliminary results show revenue 35 per cent below 2020 levels, but 5 per cent above expectations.”