Bus firms pick up speed on £218m Covid lifeline

BUS companies picked up speed following the Government’s pledge to keep funding the sector indefinitely.

The Department for Transport will hand out £218.4m in Covid19 aid over the next eight weeks to help keep regional bus services – those outside London – running in England.

And it will provide up to £27.3m a week after that ‘until a time when the funding is no longer needed’.

Bus companies were crippled financially by the need to keep services running for key workers during lockdown, even though they were bringing in hardly any money by doing so.

And they are still in a bind now because even though there are rising numbers of people using public transport, they must also stay socially distanced from one another. The Government reckons buses are now running around 80pc of normal services.

But First Group, which yesterday praised the support, said it is now operating around 90pc of services, with just 40pc of the usual number of customers.

Investors cheered the Government’s latest funding promise which was announced alongside plans to publish a ‘National Bus Strategy’ about how it will support the sector in future.

First Group shares rose 5.7pc, or 2.2p, to 41p, while Go-Ahead

Group climbed 10.2pc, or 60.5p, to 652.5p and Stagecoach by 11.4pc, or 5.26p, to 51.4p.

Liberum analysts were also encouraged by the news, which was released on Saturday but only digested by stock markets for the first time yesterday.

Analysts said: ‘We see this move as a clear indication of the Government’s intention to do whatever it takes to support bus operators through the pandemic.’

Go-Ahead and First Group helped the FTSE250 index start the week on the right foot – but their gains were upstaged by a roaring 17.6pc rally in Cineworld shares. The cinema group, which owns the Regal chain in the US, has seen its stock see-saw between huge sell-offs as traders worry about the effect the pandemic will have on attendance numbers and racing advances whenever the threat appears to be cooling off.

Shares rose 6.15p to 41.05p as UK investors celebrated a ruling in the US on Friday that ended a series of competition rules known as the ‘Paramount Decrees’ – and means movie studios could now buy cinemas.

Elsewhere on the mid-cap index, where all of the action seemed to be taking place yesterday, traders piled into shipping firm Clarkson after it effectively reversed a decision on its dividend.

The group, which saw revenues and profits rise between January and June despite the disruption to global trade, had deferred paying a 53p-per-share divi for 2019.

Now it has chosen to pay it as a special dividend, alongside a 25p interim payout. Shares rose 12.1pc, or 255p, to 2355p as a result.

And outsourcing group Capita rose by a more modest 1.3pc, or 0.5p, to 37.5p after it extended contracts with Transport for London from 2021 to 2026 to manage the congestion charge, low emission zone, ultra low emission zone and other services. These gains all helped keep the

FTSE 250 in the black – and it started the week higher by 0.6pc, or 102.01 points, to 17724.94.

The FTSE 100 rose 0.3pc, or 18.41 points, to 6050.59, and was nudged higher by gains in BP (up 2.8pc, or 8.15p, to 295.4p) and Shell (up 1.3pc, or 14.6p, to 1131.4p) as they tracked a rise in the oil price, which rose 1pc to $44.85 a barrel.

Over on AIM, shares in management software group Ideagen jumped 9.4pc, or 16.5p, to 192.5p bought Sheffield-based rival Qualsys for £15.6m.