Stagecoach warns on profits as board takes 50% pay cut

TRANSPORT: Perth bus firm says it will not meet its expected earnings

The boss of Stagecoach yesterday said the firm had good cash reserves as the firm warned its profits would be severely impacted this year.

The Perth-based bus giant said it does not expect to meet its earnings expectations for the 2020 financial year as the coronavirus affects operations.

It is still too early to reliably predict the effect the outbreak might have on profit, it said, but warned shareholders any further dividends are unlikely this year.

The firm said it had more than £290 million of available cash and undrawn committed bank facilities to underpin the continuity of the business.

Chief executive Martin Griffiths said: “We are all facing an unprecedented challenge at this time and the impact is being felt by our business and employees as with many others.

“Importantly, we have good liquidity and are taking the right, decisive actions to help mitigate as much of the impact of the current situation as we can.

“We are also working hard with our industry partners, government and local authorities on measures to protect public transport for the long-term.

“Our bus, coach and tram services are hugely important to our country’s economy and communities, even more so at this time.”

The company is in talks with Transport for London to change the details of its contract.

The board will take a 50% pay cut and members are forsaking their bonuses, while no new non-essential staff will be hired.

Meanwhile Aberdeen-based Firstgroup said it is no longer able to give guidance for the remainder of its financial year, which ends March 31.

The firm said it had “significant current liquidity” and highlighted £400m in committed undrawn facilities and free cash, as of the end of February, plus access to additional sources of financing, including a £250m bank bridging loan facility signed last week.

Stagecoach chief executive Martin Griffiths.