Stagecoach, FirstGroup, Go-Ahead drop guidance amid services cuts


Stagecoach, FirstGroup, Go-Ahead drop guidance amid services cuts

Stagecoach Group PLC (LON:SGC), FirstGroup PLC (LON:FGP) and Go-Ahead Group PLC (LON:GOG) have all dropped guidance amid cuts to services in response to the coronavirus outbreak.

The three transport firms have implemented cost-saving measures, with Stagecoach and FirstGroup freezing new recruitment and cutting salaries.

Stagecoach not to propose dividend

The FTSE 250-listed bus operator is not to propose further dividends for the financial year to 2 May, while it has £290mln in undrawn borrowing facilities alongside surplus cash balances.

READ: HSBC downgrades Stagecoach, upgrades FirstGroup as UK travel “lacks spark”

The transport group has also cut services and now operates 60% of its regional bus mileage, similar to Sunday timetables.

It is also in discussions with Transport for London to change a fixed-term contract, while the expired franchises in rail are still due payments. 

FirstGroup hit by school closures

As half of its earnings come from student buses in the US and Canada, FirstGroup has been discussing with customers a level of payment that will allow restarting services when schools reopen. 

It is also in touch with the US and UK governments to protect the Greyhound, First Bus and First Rail businesses.

As at the end of February, the FTSE 250-listed company had £400mln in undrawn committed headroom and free cash, while it has access to a £150mln accordion feature on the revolving bank facility and other leasing facilities.

75% of Go-Ahead revenue unrelated to passenger traffic

Go-Ahead said 75% of its revenue comes from contracts where there is no direct risk from changes in underlying travel demand.

The FTSE 250-listed transport firm expects “limited” impact as clients (London & international bus, UK and German rail) have committed to revised arrangements.

The company said it is “well placed” to face the crisis as it has adjusted net debt of £306mln with no debt maturities due before 2024.

At the opening bell on Monday, shares in Stagecoach dropped 4% to 58.95p, FirstGroup dipped 2% to 37.3p while Go-Ahead advanced 4% to 675.11p.

–Adds FirstGroup, Go-Ahead, shares–

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