Stagecoach (LON:SGC) hs said its regional buses are keeping afloat thanks to state support in the wake of the coronavirus crisis, while its London operations are doing well.
Revenue for its UK regional buses recovered to 50%-60% of last year’s levels, the transport group noted but added that recent government announcements on new lockdown requirements may discourage public transport use in the short-term.
The company said it expects to continue generating positive underlying earnings (EBITDA) and avoid significant operating losses thanks to COVID-19 Bus Services Support Grant Restart payments.
It said its bus operations in London are expected to deliver full-year profits in line with last year following a strong operational and financial performance.
The firm, which dropped out of the FTSE 250 back in the summer, said it continues to make positive progress in unwinding the affairs of its former train operating companies, while the Sheffield Supertram business is receiving government payments for its essential services.
The Scottish company had £605mln of adjusted liquidity as of October 7, 2020, including £437mln of cash.
“We assume a small profit in the first half and further recovery in the second half and we may need to push this back around 6 months to reflect these new restrictions on ongoing social distancing requirements,” analysts at Peel Hunt noted.
Shares rose 1% to 42.28p on Friday at the opening bell.
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