Stagecoach Group PLC Trading Statement (5677B)
09 October 2020 - 5:00PM
UK Regulatory
TIDMSGC
RNS Number : 5677B
Stagecoach Group PLC
09 October 2020
Trading statement
9 October 2020
Introduction
Stagecoach Group plc is today (9 October 2020) providing a
trading update in respect of its financial year ending 1 May 2021,
ahead of a series of meetings with analysts. Our outlook for the
year ending 1 May 2021 is unchanged from when we announced our full
year results in July 2020, recognising that the continuing
uncertainty of the COVID-19 situation and the UK's recovery makes
it difficult to reliably predict our financial performance.
Regional bus operations
The UK Bus (regional operations) business continues to be
affected by the substantial fall in passenger demand for public
transport in response to the COVID-19 pandemic. Passenger demand
had been steadily recovering since April as COVID-related
restrictions were relaxed, with commercial revenues returning to
around 50-60% of the prior year levels. We are now operating
vehicle mileage in excess of 93% of prior year levels.
The recent government announcements to impose further
restrictions may discourage public transport use in the short-term.
We are grateful for the measures put in place by the respective
governments in England, Scotland and Wales, and by our local
authority partners, to protect the continuity of local bus services
throughout this period. In August, the Department for Transport
confirmed that payments for the provision of these essential
services by regional bus operators in England would continue until
no longer required. These COVID-19 Bus Services Support Grant
Restart payments are continuing, with an eight week notice period.
While this and similar arrangements are in place, we expect to
continue to generate positive EBITDA and avoid significant
operating losses.
London bus operations
We are pleased with the continued strong operational and
financial performance of our London business. We continue to work
collaboratively with Transport for London in response to the
COVID-19 situation, and contract payments are now at normal levels
with full service restored, while an agreement on Quality Incentive
Contract income is under discussion. Our expectation is that
profitability in 2020/21 will be broadly consistent with the prior
year financial performance.
Rail
We continue to make positive progress in unwinding the affairs
of our former train operating companies.
Similar to our local regional bus businesses, our ongoing
Sheffield Supertram business is receiving government payments for
continuing the essential tram services it provides.
Financial position
The Group maintains a solid financial position with investment
grade credit ratings and appropriate headroom under its debt
facilities. We continue to have available liquidity of over
GBP800m. Since our full year results announcement on 22 July 2020,
we have seen further positive cash flow (excluding movements in
borrowings). As at 7 October 2020, our consolidated liquidity
position was as follows:
Liquidity position as at 7 October 2020 GBPm
- Cash balances 437.7
- Undrawn, committed headroom under bank facilities
expiring March 2025 266.4
--------
- Undrawn, committed headroom under bank facilities
expiring October 2021 140.0
-------------------------------------------------------- --------
Available liquidity 844.1
--------
Less: net train operating company liabilities (98.5)
-------------------------------------------------------- --------
Adjusted liquidity 745.6
--------
Less: facilities expiring October 2021 (140.0)
-------------------------------------------------------- --------
Adjusted liquidity, excluding facilities expiring
October 2021, at 7 October 2020 605.6
Retirement benefits
The trustees are progressing with the 2020 triennial valuation
of our main defined benefit pension scheme, assessing the impact of
recent events, but also recognising that the pension benefits
payable reflect very long-term obligations and investment / funding
assumptions. We expect the funding deficit to be substantially
lower than the GBP404.1m (included in the Group total of GBP413.1m)
determined on an accounting basis as at 2 May 2020. Currently, we
envisage that the funding deficit on the main scheme is in the
range of GBP150-200m, which may lead to an increase in employer
contributions over the medium to long-term.
Interim results
The next planned update is the announcement of the Group's
interim results for the half-year ended 31 October 2020 on 9
December 2020.
Chief Executive, Martin Griffiths, said:
"The safety and well-being of customers and our people remains
our absolute priority as we continue to navigate the uncertainty
from COVID-19. While the situation remains fluid, we have made
progress in the restoration of our networks to close to pre-COVID
levels and in growing passenger volumes safely within the current
restricted environment.
"We have a strong business, with good liquidity, devolved
operating companies closely focused on our customers and local
communities, good financial discipline and a supportive
relationship with government and our local authority partners. As
well as continuing to provide vital connections to jobs and public
services during the current pandemic, our sustainable public
transport services are central to long-term plans for a greener,
smarter, safer, healthier and fairer country."
For further information, please contact:
Stagecoach Group plc www.stagecoachgroup.com
Investors and analysts
Ross Paterson, Finance Director 07714 667 897
Bruce Dingwall, Group Financial Controller 07917 555 293
Media
Steven Stewart, Director of Corporate Communications 07764 774
680
Notes
This announcement contains certain forward-looking statements
with respect to the financial performance, financial position and
businesses of Stagecoach Group plc. These statements and forecasts
involve risk, uncertainty and assumptions because they relate to
events and depend upon circumstances that will occur in the future.
There are a number of factors that could cause actual results or
developments to differ materially from those expressed or implied
by these forward-looking statements. These forward-looking
statements are made only as at the date of this announcement.
Except as required by law, Stagecoach Group plc has no obligation
to update the forward-looking statements or to correct any
inaccuracies therein.
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