Stagecoach lifted by COVID-19 update

The price of shares in FTSE 250 travel operator Stagecoach (LON:SGC) rose by 11.74% to 74.81p (as of 14:15 BST) after it provided an update on current trading. Current trading remains suppressed with bus services generating roughly 17% of revenues from mileage roughly 40% of normal levels, but the new government guidance and increased payments for service provision outside of London will help recovery. The firm’s credit ratings have been maintained for the time being, but the outlook has shifted to negative.

CEO Martin Griffiths commented: “We are proud to serve the country and our communities, providing critical transport services for key workers and other essential journeys. We would like to thank our employees for their significant contribution to the national effort. Our priority at this time remains the safety and wellbeing 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. By following these guidelines, public transport can continue to be a positive and sustainable choice for local communities.

“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, wellbeing and the environment. Public transport can play a major role in a cleaner, greener and more resilient economy and society, tackling climate change with strong government action to reduce car use“.