National Express shares hit after steep losses as passengers shun travel

PA

Bus and coach firm National Express has seen shares plunge after posting steep losses and revealing travel remains “much suppressed” amid the pandemic.

Shares in the group fell as much as 17% at one stage after it posted statutory pre-tax losses of £122.2 million for the first six months of 2020, against profits of £88.4 million a year earlier, due to plummeting passenger numbers.

The group – which runs coach and bus services across the UK as well as overseas operations including US school buses – said passenger numbers tumbled 80% during global lockdowns, and by 90% in the most impacted parts of the business.

It temporarily suspended all UK coach services from April 5 to July 1 in the face of the coronavirus lockdown, but kept scaled-back operations running across the West Midlands and Dundee.

The group revealed passenger numbers remain around 80% lower across its UK coach arm, which is operating with around 15% of daily seats, while customer numbers are still 47% lower in the Midlands and 53% down in Dundee.

Its figures come after rival FirstGroup last month flagged doubts over its future after posting a £300 million annual loss due to plunging passenger numbers.

National Express said that while there were early signs of demand returning as restrictions ease, “activity remains at much suppressed levels”.

Chief executive Dean Finch said: “While there are some signs of demand returning, levels are both significantly reduced and subject to variability given local lockdowns, the impact of quarantines and uncertainty over the extent of US school reopenings.

“We do not know when pre-pandemic levels of demand will return but have developed plans to respond to future scenarios.”

The group’s interim results showed half-year revenues fell 23% to £1.03 billion, with the fall limited in part thanks to Government support programmes.

On an underlying basis, the group posted interim pre-tax losses of £60.7 million against profits of £114.6 million a year ago.

Transport expert Gerald Khoo at Liberum said: “We continue to believe that public transport usage reverts to normal on a 12 to 24-month view.

“However, the prospects of a quick and sharp recovery are fading.”