Stagecoach Group PLC counts extra costs brought by pandemic, expects short-term

The firm expects positive underlying earnings thanks to cost-saving measures and government support, while it is working on swinging to profits “over time”

() said it will take £25mln of impairments and £14mln in fuel hedging costs in results for the year to 2 May as a result of the coronavirus pandemic restrictions.

The transport firm also said the deferred payment instrument from the sale of the North American business, valued at £22mln last month, will be revised down.

READ: Stagecoach welcomes new funding to resume services in England

However, since 3 April positive cash flow excluding movements in borrowings was £8mln, while net debt as 2 May was £350-360mln.

Adjusted earnings per share for the year will be between 12.5p and 14.0p said the bus and train group, compared to 22.1p in the previous year and 10p at the half-way stage.

Capital expenditure is also being increased by £14mln, principally to include additional vehicles available for delivery in the short-term. 

As of Wednesday, it has  £800mln of available liquidity including £408mln in cash and £300mln received under the ‘s COVID-19 Corporate Financing Facility.

Stagecoach said earlier this week it is ready to restore its services closer to pre-pandemic levels after the government allocated emergency funding of £254mln for buses and £29mln for trams and light rail.

“Stagecoach expects Covid-19 to have a lasting effect on travel patterns, with increased working, studying and shopping from home, and that it will be some time for demand for public transport services to recover,” analysts at Peel Hunt commented.

“The government’s additional £254m of funding for Regional bus operations in England should help to support this period but will not help Stagecoach’s coach operations, and Oxford Tube.”

Shares shot up 8% to 72.09p on Thursday mid-morning.

–Adds analyst’s comment, shares–

Read MoreStagecoach Group PLC counts extra costs brought by pandemic, expects short-term

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