Stagecoach shares (LON: SGC) fell almost 4% on Friday morning.
The bus and rail company said in a trading update that the pandemic had impacted demand.
Stagecoach said that passenger demand had been steadily recovering since April, however, the continuing uncertainty around the pandemic means it is difficult to predict financial performance.
The group said in a statement: “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.”
Since full-year results in July, Stagecoach has seen further positive cash flow and is in a financially strong position.
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.”
Stagecoach’s next update will be interim results for the half-year ended 31 October 2020 on 9 December 2020.
Stagecoach shares (LON: SGC) are trading -2.43% at 40,92 (1036GMT).