FGP Firstgroup Plc

 
TIDMFGP 
 
FIRSTGROUP PLC 
              AGM TRADING STATEMENT AND PROPOSED RETURN OF VALUE 
 
AGM trading statement 
 
FirstGroup plc ('FirstGroup', the 'Group') will be holding its Annual General 
Meeting ('AGM') at 9.30am today. Ahead of the AGM, FirstGroup notes that 
overall trading performance year to date has been in line, and there is no 
change to management's expectations for the current financial year as outlined 
in the full year results announcement on 27 July 2021. 
 
First Bus passenger volumes have reached 65% of pre-pandemic levels on average 
in recent weeks, and we expect this to increase further as the autumn terms for 
schools and then universities get fully underway. The COVID-19 Bus Service 
Support Grant ('CBSSG') programme formally came to end on 1 September, and 
since that time delivery of local bus services across England has been 
reinforced by the Department for Transport ('DfT')'s £226.5m bus recovery 
funding package for the industry announced in early July. The grant scheme, 
which is allocated to regional bus operators based on mileage and volumes, is 
in place through to April 2022. 
 
Since the year end, the DfT have formally approved the management and 
performance-based fees to First Rail's contracted rail operations for the year 
to 31 March 2021, which were in line with the amounts accrued. The DfT have 
extended the current GWR and West Coast Partnership (incorporating Avanti) 
agreements by six months to June and October 2022 respectively. The DfT have 
also recently published Prior Information Notices which indicated that the West 
Coast Partnership's National Rail Contract which will follow the current 
agreement could last up to ten years to October 2032, and that GWR's could last 
up to six years to June 2028. The Group continues to work with the DfT toward 
signing these contracts, which will be more customer-centric and with an 
appropriate balance of risk and reward for all parties, including no passenger 
volume risk for operators. 
 
Passenger mileage in our non-core Greyhound operation has been just over half 
of pre-pandemic levels in recent weeks, supported in part by further awards 
under federal schemes including the American Rescue Plan. 
 
On 31 August 2021, the Group announced it had signed a new multi-year £300m 
sustainability-linked Revolving Credit Facility ('RCF') with a group of its 
relationship banks. The new RCF replaced all the Group's former committed 
syndicated and bilateral banking facilities, which have been repaid and 
cancelled. The Group has also repaid the UK Government's Covid Corporate 
Financing Facility ('CCFF') commercial paper as well as all of its Private 
Placement debt, and given notice to the holders of its £325m 5.25% bonds due 
November 2022 that it will exercise its right to repay them early, completing 
the reorganisation of the Group's debt arrangements following the sale of the 
North American contract businesses. 
 
As previously announced, Chief Executive Matthew Gregory and Non-Executive 
Directors Martha Poulter and Steve Gunning will step down from the Board at the 
end of the AGM today, and David Martin, Chairman, will become interim Executive 
Chairman until a permanent Chief Executive is appointed following the 
comprehensive search process which is underway. 
 
Proposed return of value update 
 
On 22 July 2021 the Group announced the completion of the First Student and 
First Transit disposal and the increase to £500m in the amount intended to be 
returned to shareholders. Having considered various methodologies and consulted 
with a range of shareholders, the Board has concluded that a tender offer is 
the optimal way to return such a significant amount in a short space of time, 
while giving shareholders who wish to retain their current investment in 
FirstGroup the option to do so. 
 
Under the tender offer, qualifying shareholders will be invited to tender some 
or all of their shares in the Group at a price per share that will be announced 
at the time of launch. If the full amount is not returned to shareholders by 
way of the tender offer, the Group intends to return any remaining surplus cash 
in a second phase, principally by way of a special dividend with an 
accompanying share consolidation, supplemented by on-market share buybacks. 
 
Implementation of the planned return of value will require approval by 
shareholders, and full details of the proposed tender offer, including the 
tender price, the timetable and instructions on how to participate, will be 
included in a tender offer circular that will be published and sent to 
shareholders in due course. 
 
Commenting, FirstGroup Chairman David Martin said: 
 
"Trading is in line with our expectations year to date, and we continue to 
support our passengers and other stakeholders as travel patterns evolve. While 
we complete the search for a new Chief Executive, my focus is on ensuring we 
continue to drive value from our strong positions in UK bus and rail, progress 
our plans to resolve our non-core Greyhound operation and complete the return 
of value to our shareholders following the sale of the North American contract 
businesses. 
 
"The vital role of public transport is clear and the policy backdrop has never 
been more supportive. With a well-capitalised balance sheet and an operating 
model that will support an attractive dividend for shareholders commencing in 
2022, I am confident that FirstGroup is well-placed to deliver sustainable 
value creation as a focused UK public transport leader." 
 
Contacts at FirstGroup:                  Contacts at Brunswick PR: 
Faisal Tabbah, Head of Investor          Andrew Porter / Simone Selzer 
Relations                                Tel: +44 (0) 20 7404 5959 
Stuart Butchers, Group Head of 
Communications 
corporate.comms@firstgroup.co.uk 
Tel: +44 (0) 20 7725 3354 
 
Notes 
 
Legal Entity Identifier (LEI): 549300DEJZCPWA4HKM93. Classification as per DTR 
6 Annex 1R: 3.1. 
 
FirstGroup plc (LSE: FGP.L) is a leading private sector provider of public 
transport services. With £4.3 billion in revenue and around 30,000 employees, 
our UK divisions transported nearly 700,000 passengers a day in the 52 weeks to 
27 March 2021. First Bus is the second largest regional bus operator in the UK, 
serving two-thirds of the UK's 15 largest conurbations with a fleet of c.5,000 
buses. First Rail is the UK's largest rail operator, with many years of 
experience running long-distance, commuter, regional and sleeper rail services. 
We operate a fleet of c.3,750 rail vehicles on four contracted operations 
(Avanti, GWR, SWR, TPE) and two open access routes (Hull Trains and the new 
Lumo service launching in October 2021). We also operate Greyhound, the only 
national operator of scheduled intercity coaches in the US, with a unique 
network of 2,300 destinations and an iconic brand. We create solutions that 
reduce complexity, making travel smoother and life easier. Our businesses are 
at the heart of our communities and the essential services we provide are 
critical to delivering wider economic, social and environmental goals. We are 
formally committed to operating a zero-emission First Bus fleet by 2035 and to 
cease purchasing further diesel buses after 2022; and First Rail will help 
support the UK Government's goal to remove all diesel-only trains from service 
by 2040. Visit our website at www.firstgroupplc.com and follow us 
@firstgroupplc on Twitter. 
 
 
 
END 
 
 

(END) Dow Jones Newswires

September 13, 2021 02:00 ET (06:00 GMT)

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