Stagecoach warns people will permanently travel less as profits crash 92%

The boss of bus group Stagecoach has warned that people will permanently travel less due to the shift towards home-working during the coronavirus pandemic as the group revealed that profits crashed more than 90%.

Chief executive Martin Griffiths said Covid-19 will see people make fewer journeys even after the crisis as a five-day working week in the office becomes a thing of the past.

But he said he is “optimistic” that bus travel demand will bounce back amid a push to switch away from single car journeys.

Speaking to the PA news agency, Mr Griffiths said: “Some things have changed forever.

“Not everyone will be going back to working five days a week (in the office).

“The numbers of journeys we make over time will be less, but I’m confident we’ll pick up a bigger proportion of that smaller number of journeys.”

He added: “Our industry’s plastic bag moment is the single car journey – government and local authorities have got to address how to get people out of cars and on to public transport.

“I don’t think anybody has lost sight of that coming out of this pandemic.”

His comments came as the group reported a 92% plunge in half-year profits to £5.4 million as it was hammered by slumping demand for public transport.

It saw revenues nearly halve to £454.6 million in the six months to October 31, against £800.2 million a year earlier, although shares jumped 10% as the group remained profitable.

Coronavirus lockdowns and ongoing restrictions have left regional bus commercial sales at around 54% of levels seen last year, which the group said was a step back, having recovered to almost 60% at one stage.

Bus demand fell to 44% of pre-Covid levels at one point during the second lockdown across England, it added.

Britons have switched to travel by car during the crisis, with Stagecoach saying car use is “significantly” ahead of public transport, at up to 90% of levels seen a year earlier in October.

But the group said it has still seen a “significant recovery” in passenger demand since May, even with the impact of the second lockdown across England.

It also put faith in support from the Government “in pursuing our shared objective to drive modal shift from car to public transport”.

The industry is holding ongoing talks with the Government to secure future support, given the impact of the pandemic on working patterns and public transport demand.

Mr Griffiths said: “We are working closely with our government and sector partners on a new framework to ensure the country’s public transport networks adapt to new working and travel patterns, are fit for the post-Covid world, and meet the continuing needs of our customers and communities.”

Half-year results showed interim regional bus earnings slumped 84% to £9.1 million, helped by Government support to keep essential services running through the pandemic.

Stagecoach did not disclose how much government support it received, but said the group would have posted losses without it.

But the London bus business put in a resilient performance, with half-year earnings rising to £9.2 million from £5.1 million a year earlier.

In its rail arm, Stagecoach said the Sheffield Supertram business is receiving government payments to provide essential tram services as the group continues to unwind its former train operating companies.