By Scott Wright
SHARES in Stagecoach leapt nearly nine per cent after the transport giant signalled plans to increase bus mileage closer to pre-pandemic levels “in the near future” and a “significant” increase in available liquidity.
In an update to the City, the Perth-based bus giant cited positive cash flow and new borrowing capacity, including cash and undrawn bank facilities which now stand at more than £800 million.
It comes in a week which has seen transport companies boosted by a commitment by the UK Government to step up bus, tram, and light rail services in England as the lockdown is gradually eased south of the Border. The Department for Transport (DfT) pledged funding of £283m to increase the frequency of services as people steadily return to work following the lockdown.
Stagecoach said plans are in place to increase its regional bus mileage close to pre-Covid levels “in the near future”. Its mileage is currently running at around 40 per cent of the level it was before the coronavirus outbreak.
Commercial sales at local bus companies are now at around 17% of prior-year levels.
Stagecoach said that, in light of its improved liquidity, it has increased its planned capital expenditure by £14m after slashing spending plans in early April. On April 3 it said it had cut previously planned capital expenditure comprising £105m of cash capital expenditure and £38m of new leases to £40m and £20m respectively.
Chief executive Martin Griffiths said: “We would like to thank our employees for their significant contribution to the national effort. Our priority at this time remains the safety and well-being of our customers and our employees, and we have put in place extensive enhanced Covid-related measures in line with public health guidance. We have also provided customers with detailed guidance on how they can use our services easily and play their part in keeping our transport networks safe for everyone.
“We see 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. At the same time, we see positive drivers for our business from a renewed societal focus on health, well-being and the environment. Public transport can play a major role in a cleaner, greener and more resilient economy and society.”
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