National Express unveils plan to help combat Covid-19 crisis
Bus, coach and rail group National Express has announced the placing of up to 19.99 per cent of its share capital to further strengthen its financial position through the coronavirus crisis.
The Birmingham headquartered company, which operates bus services in the West Midlands, said that in its worst-case scenario, profit could fall up to 40 per cent in 2020.
It said that the move had the “unanimous support” of its board, some of whom will contribute about £1 million to the placing.
The firm also said that it had set an “aspiration” to reintroduce its dividend in 2021.
National Express, which has already secured £1.3 billion in additional liquidity, said that the placing would allow it to reduce its liquidity and position it for investment opportunities as the current pandemic abates.
Group chief executive Dean Finch said: "Our immediate priorities have been to protect the health and wellbeing of colleagues and customers and secure the long term sustainability of the business.
"We have acted swiftly and decisively and have made significant cost-cutting measures, struck agreements with public authorities and contracted customers to maintain payment, and secured enhanced liquidity and covenant waivers. These have all been crucial in underpinning our future prospects.
"The placing builds on these actions, providing enhanced resilience and financial flexibility as we address an extended period of uncertainty and it increases our ability to invest in further growth opportunities once this period has passed.
"By strengthening our balance sheet we are also able to set a new, lower gearing target. Alongside our industry leading operational capabilities, I believe a stronger balance sheet will be a source of differentiation and competitive advantage for National Express going forwards.
"National Express went in to this pandemic as the leader in all the markets we serve. Whilst the next few months will remain uncertain, we are already seeing a number of growth opportunities as existing and potential new customers seek a financially secure and reliable operating partner.
"I look forward to maintaining our leadership position and resuming full services as soon as possible, delivering safe, high-quality services to our customers as well as strong and sustainable returns for our shareholders."
