Trading Statement

Trading statement

12 October 2021

Introduction

Stagecoach Group plc, Britain's biggest bus and coach operator, is today (12 October 2021) providing a trading update in respect of its financial year ending 30 April 2022, ahead of a series of meetings with analysts. Our outlook for the year ending 30 April 2022 is unchanged from when we announced our full year results in June 2021.

Regional bus operations

Passenger demand for our regional bus operations has been recovering in recent weeks with the return of schools and universities across the country, with journey numbers in excess of 70% of equivalent 2019 levels by the end of September. We are operating vehicle mileage at around 94% of 2019 levels.

For the week ended 2 October 2021, journey numbers were 70.1% of the figure for the equivalent period in 2019, fare paying journey numbers were 74.4% and concessionary journey numbers were 60.2%. Commercial sales as a percentage of the 2019 levels are higher than fare paying journey numbers, which is partly attributable to travel patterns during this COVID-19 recovery period, whereby single tickets represent a higher proportion of sales than in 2019, while weekly and monthly tickets represent a lower proportion. We continue to progress a number of ticketing initiatives to reflect the changes we are seeing in travel patterns.

Governments across the UK continue to make payments to ensure the continuity of bus services as we emerge from the COVID-19 pandemic. As anticipated, the COVID-19 Bus Services Support Grant Restart ("CBSSG") for local bus services in England, excluding London, came to an end on 31 August 2021. The Department for Transport has put in place a £226.5m Bus Recovery Grant ("BRG") funding package to cover the period from 1 September 2021 to 15 March 2022. We, and other bus operators, continue to work closely with the Department for Transport on the terms and conditions of the scheme, whereby funding is allocated to operators with reference to revenues and mileage operated. In Scotland, the COVID-19 Support Grant Restart ("CSG") payments for continuing bus services have now been extended through until 31 March 2022.

We are continuing to seek new opportunities to diversify and grow the business. We are pleased to have successfully retained the Rail Replacement contract for London North Eastern Railway following a competitive tender, and continue to actively pursue other UK Rail Replacement bids.

London bus operations

We are pleased with the continued strong operational and financial performance of our London business, where we have made progress to develop our commercial activities to supplement our core Transport for London contract work.

Rail

Similar to our local regional bus businesses, our ongoing Sheffield Supertram business is receiving government payments for continuing the essential tram services it provides. The Light Rail Revenue Restart Grant ("LRRRG") scheme ended on 19 July 2021, and has been replaced by a £56m funding package to light rail operators that runs from 20 July 2021 to April 2022. We continue to work with South Yorkshire Passenger Transport Executive and the Department for Transport on arrangements for allocating this funding.

Corporate activity

On 21 September 2021, we announced that the Group was in discussions with National Express Group plc ("National Express") in relation to a possible all-share combination. Discussions between the parties and reciprocal customary due diligence remain ongoing and there can be no certainty that any offer will be made.

Financial position

The Group maintains a solid financial position with investment grade credit ratings, substantial available liquidity and appropriate headroom under its debt facilities. S&P global recently revised the Group's outlook from negative to stable and affirmed the BBB- rating, while Moody's recently confirmed its rating of the Group remained unchanged at Baa3 with negative outlook.

Interim results

The Group's interim results for the half-year ended 30 October 2021 are scheduled to be announced on 8 December 2021.

Martin Griffiths, Stagecoach Group Chief Executive, commented: "The momentum in passenger journeys and sales reflects a pick up in activity and travel across the UK, and growing confidence to return to public transport. While there remains some uncertainty around how the recovery continues, our outlook for the year ending 30 April 2022 is unchanged from when we announced our full year results in June 2021. Strong partnership working between bus operators, national government and local transport authorities is fundamental to transforming the country's bus networks and tackling climate change."

For further information, please contact:

Stagecoach Group plc www.stagecoachgroup.com

Investors and analysts

Ross Paterson, Finance Director 07714 667 897

Bruce Dingwall, Group Financial Controller 07917 555 293

Media

Steven Stewart, Director of Corporate Communications 07764 774 680

Notes

This announcement contains certain forward-looking statements with respect to the financial performance, financial position and businesses of Stagecoach Group plc. These statements and forecasts involve risk, uncertainty and assumptions because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. These forward-looking statements are made only as at the date of this announcement. Except as required by law, Stagecoach Group plc has no obligation to update the forward-looking statements or to correct any inaccuracies therein.

As previously announced, in accordance with Rule 2.6(a) of the City Code on Takeovers and Mergers ("Code"), National Express is required, by not later than 5.00 p.m. (London time) on 19 October 2021, to either announce a firm intention to make an offer for the Group in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer for the Group, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline can be extended only with the consent of the Group and the Takeover Panel in accordance with Rule 2.6(c) of the Code.