Emergency fund helps plug bus firm revenue

CARDIFF Bus received emergency funding from the Welsh Government during the coronavirus pandemic.

The firm has faced years of losses, and a reduction in passengers as a result of the lockdown.

Its latest annual report shows “uncertainty” over some of its finances.

It is not known how much funding the council-owned firm received.

In a statement signed on behalf of the board in its annual report, dated March 9, it states its situation “may cast significant doubt” on its “ability to continue as a going concern and, therefore, it may be unable to realise its assets and discharge its liabilities in the normal course of business.”

In the financial year ending March 31, 2019, the group’s profit after taxes stood at £57,000 and its loss after taxes was £680,000.

The report states that during March 2019 the group replaced its overdraft with a secured £1.5m loan repayable over three years and an additional £500,000 overdraft.

It says: “The loan was not drawn down until April 2019. The loan is subject to certain covenants, which are tested annually.

“The group is forecasting a potential breach of these covenants at March 31, 2020 and the directors are in discussions with the bank on the potential to waive these covenants.”

It adds that one risk it faces is its workforce having to self-isolate.

Another issue it raises is the lack of a bus station, adding the impact will continue until it is reopened.

The firm accessed the “Bus Emergency Scheme” launched by the Welsh Government in July.

The scheme came as “revenue is expected to remain low for the foreseeable future” for bus companies.

A Welsh Government spokesperson said: “The bus industry has faced severe financial challenges in recent months as a result of coronavirus.

“We recognise the importance of bus services to our communities and have introduced emergency funding to support operators. Cardiff Bus has been one of many companies to access this support. When launching our Bus Emergency Scheme, we were clear that we will use it to work collaboratively in forming the basis of a new longer-term funding scheme, in the interests of passengers and operators.”

Cardiff Bus lost £1.9m in 2017-18, which led the company to announce it was cutting 12 bus routes before the council stepped in and saved six of them.

A Cardiff council spokesman said: “Like every other public transport operator, Cardiff Bus has been impacted by Covid-19 and the subsequent lockdown and has been drawing on available Welsh Government funding to support its operations through the crisis.

“Discussions are ongoing between Cardiff Bus, the council, Welsh Government and others around the financial support that the bus industry as a whole will require as we emerge from lockdown.

“The council, as the company’s sole shareholder, will continue to work closely with Cardiff Bus and Welsh Government to investigate ways in which vital transport services for local communities can be provided.”