Stagecoach’s passenger recovery hits 70% of pre-Covid levels

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Passenger demand for Stagecoach’s regional bus operations has been recovering in recent weeks with the return of schools and universities across the country, with journey numbers of 70% of the equivalent 2019 levels by the end of September. It is operating vehicle mileage at around 94% of 2019 levels.

For the week ended 2 October 2021, 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 the 2019 levels are higher than fare paying journey numbers, which is partly attributable 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. 

Stagecoach says: “We continue to progress a number of ticketing initiatives to reflect the changes we are seeing in travel patterns.”

Stagecoach Group CEO Martin Griffiths says: “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.”

Governments across the UK continue to make payments to ensure the continuity of bus services as we emerge from the COVID-19 pandemic.

As anticipated, the COVID-19 Bus Services Support Grant Restart (CBSSG) for local bus services in England, excluding London, came to an end on 31 August 2021.

The Department for Transport has put in place a £226.5m Bus Recovery Grant (BRG) funding package to cover the period from 1 September 2021 to 15 March 2022.

In a trading update to the Stock Market, Stagecoach says: “We, and other bus operators, continue to work closely with the Department for Transport 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 now been extended through until 31 March 2022.

“We are continuing to seek new opportunities to diversify and grow the business. We are pleased to have successfully retained the Rail Replacement contract for London North Eastern Railway following a competitive tender, and continue to actively pursue other UK Rail Replacement bids.

“We are pleased with the continued strong operational and financial performance of our London bus business, where we have made progress to develop our commercial activities to supplement our core Transport for London contract work.”

The group’s final rail business, Sheffield Supertram, is receiving government payments for continuing the tram services it provides.

The Light Rail Revenue Restart Grant (LRRRG) scheme ended on 19 July 2021, and has been replaced by a £56m funding package to light rail operators that runs from 20 July 2021 to April 2022.

“We continue to work with South Yorkshire Passenger Transport Executive and the Department for Transport on arrangements for allocating this funding,” says Stagecoach.

Referring to its 21 September 2021 announcement that Stagecoach Group is in discussions with National Express Group plc in relation to a possible all-share combination, Stagecoach says: “Discussions between the parties and reciprocal customary due diligence remain ongoing and there can be no certainty that any offer will be made.”

The Group “maintains a solid financial position” with investment grade credit ratings, substantial available liquidity and appropriate headroom under its debt facilities. 

S&P global recently revised the Group’s outlook from negative to stable and affirmed the BBB- rating, while Moody’s recently confirmed its rating of the Group remained unchanged at Baa3 with negative outlook.

The Group’s interim results for the half-year ended 30 October 2021 are scheduled to be announced on 8 December 2021. 

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