Stagecoach warns of job cuts as preliminary results are published

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Stagecoach Group has published its preliminary results for the year ended 2 May 2020, warning that it expects the effects of the coronavirus pandemic on its business – and public transport as a whole – to be long-lasting.

Highlighting its cost reduction programme, the company said: “We expect a lasting effect of the COVID-19 pandemic on travel patterns with an acceleration in trends of increased working from home, shopping from home, telemedicine and home education. We anticipate that it will be some time before demand for our public transport services returns to pre-COVID levels and we are planning for a number of scenarios.

“We are continuing to review our cost base, to reduce overheads and plan for adjustments to direct and semi-direct costs across a range of scenarios. At the same time, we see positive drivers for our business from a renewed societal focus on health, wellbeing and the environment. Public transport can play a major role in a cleaner, greener and more resilient economy and society, tackling climate change with strong government action to reduce car use.”

It also announced that some office-based jobs could be under threat as part of plans to further cut costs. Although precise figures are not known as yet, the company expects to save £9m annually as a result of the redundancies.

Martin Griffiths, Stagecoach Group Chief Executive, said: “We have achieved a creditable set of financial results in what has been one of the most challenging and sobering periods for citizens, communities and economies across the globe in living memory.

“Throughout these difficult times, our priority has firmly remained the safety and wellbeing of our people and our customers and protecting the long-term sustainability of our business. We are proud of the incredible response of our people and other key workers to the COVID-19 pandemic and the part they have played in getting the country through the worst.  Our thoughts are with the families of our transport colleagues and others who we have lost to COVID-19.

“Prior to the COVID-19 pandemic, the business was on track to meet its expectations for the full year. We made good progress in delivering on our three key strategic objectives: to maximise our core business potential, manage change through our people and technology, and grow by diversifying, while maintaining our relentless focus on safety and customer service.

“In responding to the more recent global challenges, we have taken decisive action so that the business remains in as strong a position as possible and well placed to secure the significant long-term opportunities we see for public transport.

“Supportive short-term actions by government and our local authority partners have helped protect public transport networks, which are critical to the country. We have also been encouraged by the good momentum created by the positive direction of government bus policy and investment.

“Despite recent events, it is critical that all partners continue to work together to prioritise better mobility, maintain the cleaner air and take action to protect the future of our planet as part of the plan for global recovery. We are ready and committed to play our part in creating further value for our investors, customers, employees, communities and the environment.”