Government contracts drive Stagecoach revenues to £1.2bn but its board rejects return to investor dividend payments
- Stagecoach raked in £1.17bn worth of revenue, preliminary results show
- The transport group’s operating profit came in at £72.7m
- No resumption of dividend payments to shareholders yet, group says
Stagecoach Group raked in £1.17billion worth of revenue over the past year, up from £928.2million the previous year.
The transport firm’s adjusted operating profit for the year reached £72.7million, up from £48.1million a year ago.
Passenger volumes and commercial sales at the company’s regional bus arms were running at around 81 per cent and around 91 per cent of pre-Covid levels, respectively, for the week ending 18 June.
Growth: Stagecoach Group raked in £1.17bn worth of revenue over the past year, preliminary results suggest
The group’s annual bottom line for the year reflected revenue growth and payments from the UK and Scottish governments for continuing public transport services, it said.
Despite remaining ‘positive’ about its longer-term prospects, Stagecoach did not resume dividend payments for shareholders over the period.
It told investors that its board ‘did not believe it was appropriate to resume dividend payments’.
However, it said it would keep its dividend policy ‘under review’ taking account of its recent change in ownership and its desire to maintain an investment grade credit rating.
The group remains a public limited company, but is now majority-owned by Inframobility UK Bidco Limited, which is indirectly owned by an international infrastructure fund managed and advised by DWS Infrastructure.
Boss Martin Griffiths said: ‘We are in a good financial position, supported by recovering customer demand and continued investment grade credit ratings, as we look to the next phase of our journey under new ownership.
‘We are not immune from the global macro-economic headwinds. However, we believe our good value public transport services offer consumers help in managing the cost-of-living challenges and high fuel and energy prices, supporting our ambitions around modal shift from car to bus.
‘Looking ahead, public transport remains critical to economic recovery, healthy and connected communities, levelling up the country, and delivering a net zero future, and I am confident Stagecoach has positive long-term prospects.’
The group also told investors it had made a ‘good start’ to the year ending 29 April 2023, and ‘while there remains some uncertainty around the pace of recovery, we continue to see positive long-term prospects for the business’.
It added: ‘As part of our business strategy, we are continuing to seek new opportunities to diversify and grow our business both in the UK and overseas.
‘We are proud to have won contracts linked to major events, including the forthcoming 2022 Commonwealth Games in Birmingham, and to have retained existing rail replacement contracts.’
Stagecoach also said it had seen a ‘substantial’ reduction in net pre-deferred tax pension liabilities, which fell from £263.8million to £29.8million.
Its net debt plus net train operating company liabilities fell £136.5million from £401million to £264.5million.
On rising motor fuel prices, Stagecoach said: ‘Our fuel hedging policy has minimised the immediate impact of this cost pressure. In addition, we believe that the increased cost of motoring can help encourage a shift by consumers to more sustainable public transport.’