Britain’s biggest bus operator has warned it cannot say how long taxpayers will need to bankroll loss-making services hit by coronavirus.
Stagecoach said the pandemic will have a “lasting effect” on commuting as annual profits plunged almost two-thirds.
The lockdown has accelerated a pre-Covid trend of working from home, boss Martin Griffiths said.
“It would be kind of naive and not have a lot of credibility to sit here and things aren’t going to change,” he said. “All of a sudden … a huge amount of the workforce has been asked to work at home. And not all of that will reverse.”
The Government has pledged hundreds of millions of pounds to keep bus services running during lockdown to ensure key workers such as nurses, doctors and teachers could get to work.
Propping up the industry will continue for at least another 12 weeks.
Mr Griffiths said that the taxpayer support only covered costs and did not allow the operator to turn a profit.
Finance chief Ross Patterson, who has led discussions with ministers on the measures, said: “For how long do we need [state support]? That is a function of the Covid-related restrictions, the messaging around public transport, and what is the demand for our services. All of which are difficult to predict exactly.”
Mr Griffiths remained positive over the company’s future, however. Despite a smaller pool of commuters Stagecoach’s raison d’etre remained “to get people out of cars and on to buses”.
“If we can get even a relatively small percentage shift … there may be fewer journeys overall, but the percentage of those journeys that are made by public transport will go up,” he said.
“I can’t answer when some of that [demand] will return. And that’s why it is good that the Government is recognising the importance of keeping the bus networks going.
“Whether it ever gets back to 100pc, I don’t know, but I am confident that we will get back to something much nearer to where we were than where we have been,” Mr Griffiths added.
“Government messaging will change. It hasn’t been difficult for us; messaging to avoid your business, it’s not ideal. We know at the right time they will switch, there is going to be a big campaign to get people back onto public transport.”
Stagecoach’s profit plunge for the year to May 2 was skewed not only by the first full month of lockdown, but the Government’s controversial decision to kick the FTSE 250 firm off the railways last year.
Stagecoach’s bids for four franchises were deemed non-compliant by Chris Grayling, the former Transport Secretary – a decision upheld after the Perth-based operator challenged it in the High Court earlier this year.
Mr Griffiths said: “I am disappointed that we lost [the trial]. We have no regrets that we challenged. We accept the judge’s decision. And I don’t envy my colleagues … who are involved in the railways.”
The Stagecoach boss said the firm was “absolutely right” not to overbid for rail contracts. “And the last three months have just emphasised that for me.”
Stagecoach shares rose almost a tenth after annual returns beat City expectations, but the company is worth just £300m.
Gerald Khoo, analyst at stock broker Liberum, said: “The results were not as bad as feared. Management’s outlook is very cautious, anticipating a lasting impact from COVID-19 on local travel patterns. We believe management is too pessimistic, but the level of uncertainty is unprecedented.”