Bosses of two of the UK’s biggest coach companies are still trying to hash out a deal to merge their firms as the sector starts to see the shoots of recovery from Covid.
Stagecoach said that it is in talks with National Express over a potential deal that would see National Express shareholders take a three-quarter stake in the new business.
“Constructive discussions are continuing with National Express Group plc on a potential combination of both groups that would deliver strong value creation for both sets of shareholders,” the firm said on Wednesday.
If the businesses do combine, the new company will control around 30% of the UK’s bus market.
Stagecoach said that it had a “positive outlook” regardless of whether it continues as usual, or is absorbed into National Express.
The business said that pre-tax profit increased nearly sixfold to £31 million as passengers started to travel again across the country in the six months to the end of October.
Passengers were still travelling less than before the pandemic, though. Passenger journeys were last month at 70% of where they were in November 2019, and have dropped a little further because of Storm Arwen and new Covid guidance.
But the business will still be able to rely on Government support until next spring, which will help it keep running lines.
“We are pleased at the positive progress of the business as confidence in public transport returns and more customers use our bus, coach and tram services,” said chief executive Martin Griffiths.
“While the pace of recovery may vary, we are well-placed to deliver on the extensive opportunities beyond the pandemic and on the back of the Cop26 climate change conference to attract people out of cars to more sustainable public transport.
“In the first half of the financial year, we have delivered positive new contract wins, including key transport contracts for the Birmingham 2022 Commonwealth Games.
“We are also progressing several investments to enhance our customer offer, as well as new ticketing initiatives to respond to post-pandemic lifestyles.”