By Kristy Dorsey

Revenues at Stagecoach have fallen by nearly a quarter, with the company underlining the role of Government funding in keeping bus services running as Covid-19 continues to impact demand for public transport.

In its accounts for the year to May 2, the Perth-based transport group said it expects a “lasting effect” from the pandemic on travel patterns, with an acceleration towards working, shopping and schooling from home meaning it will “be some time” before demand returns to pre-Covid levels. Stagecoach declined to make a profit forecast for the coming year, but said continuing support from the Government should ensure it continues to generate positive earnings.

The Government has been providing subsidies since March to help bus operators maintain services for key workers while the advice for most was to stay off public transport. The UK Government recently changed its guidance on this, saying that people may now use it, while advice from Transport Scotland states that passengers should consider whether they “need to use public transport, to ensure it is available for those with no alternative”.

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Chief executive Martin Griffiths told The Herald that bus passenger numbers are beginning to rise despite some confusion among the public.

“The messaging from a passenger point of view is difficult, there is no doubt about that,” he said, adding that he understands the reasons why this is the case: “I am not running down the Government.”

Capacity amid current social distancing requirements is running at about 40 per cent per vehicle, with approximately 80% of services in operation. During the height of lockdown, Stagecoach buses across the UK were running at 40% of previous average mileage, falling to 25% in Scotland.

Meanwhile, UK passenger numbers are now at about 40% of last year’s level, compared to just 10% when lockdown restrictions were their most stringent.

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During that period, as many as 14,000 of Stagecoach’s 25,000 UK employees were placed on furlough, though some have now been brought back.

Finance director Ross Paterson declined to say how much Government funding has been received by Stagecoach. Current or replacement financial arrangements for regional bus operators are expected to continue until “at least” October 14 in England, and to August 17 in Scotland.

Mr Paterson said demand currently roughly matches up with available capacity, with buses not being forced to “leave people on the pavement”. “But clearly as demand starts to creep up, that could become more of an issue,” he added.

Revenues fell to £1.42 billion during the year to May 2, down from £1.89bn previously. Pre-tax profits more than halved to £40.6 million, versus £101.2m the year before.

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The figures were affected both by lockdown and by the loss of its East Midlands Trains franchise in August 2019. The company’s Virgin Rail Group joint venture to run the West Coast rail franchise also came to an end in December, leaving its UK train operations limited to the Sheffield Supertram.

Stagecoach has indicated it has no interest in returning to the UK rail market, though it is bidding for business in other countries. Mr Griffiths said this will remain the case unless there is a change to the “risk-reward profile” in the UK.

“You never say never to anything – I have no ideology on that, but the rail experience latterly in the UK was disappointing for us,” he said.