Stagecoach releases trading statement amid NX merger bid

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Stagecoach, which is currently the subject of a merger bid with National Express, has published a trading update for its financial year ending 30 April 2022, ahead of a series of meetings with analysts. The outlook remains unchanged, the operator said, from when it announced its full year results in June this year.

Looking at its regional bus operations, Stagecoach said that passenger demand has been recovering in recent weeks with the return of schools and universities, with journey numbers in excess of 70% of equivalent 2019 levels by the end of September and around 94% of 2019 levels of vehicle mileage being operated.

For the week ending 2 October, Stagecoach said journey numbers were 70.1% of the figure for the equivalent period in 2019; fare paying journey numbers were 74.4% and concessionary journey numbers were 60.2%. Commercial sales as a percentage of 2019 levels are higher than fare paying journey numbers, which the firm attributed to travel patterns during this Covid-19 recovery period, whereby single tickets represent a higher proportion of sales than in 2019, while weekly and monthly tickets represent a lower proportion.

The Covid-19 Bus Services Support Grant Restart (CBSSG) for local bus services in England, excluding London, came to an end on 31 August, replaced by the £226.5m Bus Recovery Grant (BRG) funding package to cover the period from 1 September to 15 March, and Stagecoach said it continues to work closely with the DfT on the terms and conditions of the scheme, whereby funding is allocated to operators with reference to revenues and mileage operated. In Scotland, the Covid-19 Support Grant Restart (CSG) payments for continuing bus services have been extended through until 31 March 2022.

The firm said that it is continuing to seek new opportunities to diversify and grow its business and is pleased to have successfully retained the rail replacement contract for London North Eastern Railway following a competitive tender.

The company said that it was also pleased with the continued strong operational and financial performance of its London business, where it said it has made progress to develop commercial activities to supplement the core Transport for London contract work.

Martin Griffiths, Stagecoach Group Chief Executive, commented: “The momentum in passenger journeys and sales reflects a pick up in activity and travel across the UK, and growing confidence to return to public transport. While there remains some uncertainty around how the recovery continues, our outlook for the year ending 30 April 2022 is unchanged from when we announced our full year results in June 2021. Strong partnership working between bus operators, national government and local transport authorities is fundamental to transforming the country’s bus networks and tackling climate change.”

The Group’s interim results for the half-year to 30 October are scheduled to be announced on 8 December.

With regards to the potential share combination with National Express, the company said that discussions between the parties and reciprocal customary due diligence remain ongoing and there can be no certainty that any offer will be made. RICHARD WALTER