23rd Mar 2020 10:48
(Alliance News) - Transport operator Go-Ahead Group PLC on Monday said it will suspend the payment of recently-declared dividend as coronavirus is hurting its operations.
The FTSE 250-listed bus and trains services provider said the Covid-19 situation is rapidly evolving, particularly in the UK where the majority of the company's activities take place, with developments directly hurting travel demand.
Go-Ahead said 75% of its revenue is derived from contracted markets where there is no direct revenue risk from changes in underlying travel demand.
The company's financial exposure is therefore predominantly linked to the proportion of its revenue derived from demand-driven commercial services which account for around 25% of its revenue. The parts of Go-Ahead's business that fall within this category are regional bus, Norwegian rail and Southeastern, which is due to expire on Tuesday next week.
Turning to its cash position, Go-Ahead said it has no debt maturities ahead of 2024. The company reported a strong balance sheet and good liquidity with adjusted net debt of GBP306.4 million as at December 28.
However, the company said it has decided to suspend the proposed interim dividend of 30.17 pence per share declared on March 12, until "there is greater clarity" on the impact of Covid-19.
"Once this crisis is over, strong bus and rail connections will be needed to rebuild our economy and support our communities; providing links to education, employment, retail and leisure facilities, and between friends and families. In our regional bus businesses, this means we need support from national government in the short term to maintain these vital lifelines for the long term," said Chief Executive David Brown.
"In the meantime, we aim to support the UK's efforts in tackling the crisis by providing unutilised buses to transport NHS workers, supporting supermarkets with food deliveries and delivering essential goods to cut off and self-isolating communities," added Brown.
Go-Ahead shares were trading 14% higher on Monday at 742.48p each.
By Evelina Grecenko; [email protected]
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