FIRSTGROUP PLC
pre close Trading update
FirstGroup
plc ('FirstGroup' or the 'Group') today provides an update on
trading since the half year results published on 23 November 2023.
First
Rail overview
Trading in
the First Rail division has been slightly ahead of the Group’s
expectations due to strong performance in the division’s Open
Access operations as a result of continued strong demand, effective
yield management, and the settlement of certain one-off
infrastructure and other claims during the period.
Open
Access growth
On
5 January 2024, the Group submitted
to the Office of Rail and Road (‘ORR’), the first phase of an
application for a new Open Access rail service between London and Sheffield. The proposed service would be part
of the Group’s Hull Trains business and comprises two return
journeys a day from London King’s Cross calling at Retford,
Worksop, Woodhouse and Sheffield.
A sizeable number of rail passengers currently drive to Doncaster
station to pick up faster services to London rather than travelling via Sheffield; a new, convenient rail service from
these local stations could help reduce the number of car
journeys.
The ORR
consultation with industry partners has concluded. Capacity and
performance modelling is now underway. The Group is also working on
the fleet strategy and is in discussions with rolling stock
companies. It is anticipated that services could begin in the
second half of the 2025 calendar year.
In
addition, Lumo has identified opportunities to extend a number of
its daily London to Edinburgh journeys to Glasgow. Discussions are in progress with
Transport Scotland and Network Rail with regards to the final route
options and timings, ahead of an application to the ORR for access
rights. If successful, the new services will be operated with the
existing Lumo fleet of all-electric trains and it is anticipated
that they could begin in the second half of the 2025 calendar
year.
Elizabeth
Line bid
The Group
has been shortlisted with its bid partner Keolis SA to participate
in the competitive process to select an operator for the Elizabeth
Line on behalf of Transport for London. We look forward to submitting a
compelling bid which demonstrates our collective experience of
running metro and heavy rail systems.
First
Bus overview
Trading in
the First Bus division is strong and in line with the Group’s
expectations. We continue to focus on commercial opportunities to
drive growth, the delivery of operational efficiencies and our
continued progress in the electrification of the First Bus fleet
and infrastructure. The division is on track to have more than 600
electric buses (c.15% of its fleet) and three fully electric
commercial bus networks in England
by Spring 2024, building on the progress already made in
Scotland.
Completion
of acquisition of York Pullman Bus Company
Following
the conclusion of a customary regulatory review, the Group
completed the acquisition of York Pullman Bus Company Ltd (‘York
Pullman’) on 23 February 2024.
York Pullman is a high-performing
business with five well-established coach services brands. It
provides home-to-school and college contracted services and private
hire operations including rail replacement services. It also
operates a small number of local bus routes on behalf of several
local authorities, complementary to the operations of First Bus in
York. For the year ended
31 December 2022, York Pullman reported revenues of c.£10m and
EBIT of c.£2m. The acquisition will provide profitable growth
opportunities in adjacent contracted services and commercial
markets, with the opportunity for development into other locations
across the UK.
Corporate
Since the
announcement of the H1 2024 results, the Group has continued to
opportunistically purchase its September
2024 6.875% bonds. As a result of purchases totalling £75.9m
since 23 November 2023, £96.1m of the
bonds remain outstanding.
FY
2024 Guidance
Due to the
slightly stronger performance in First Rail detailed above, the
Group anticipates that its FY 2024 Group adjusted operating profit
and Group adjusted earnings will be slightly ahead of the Board’s
previous expectations.
The Group
anticipates to end its FY 2024 financial year in an adjusted net
cash position of £60-70m, with c.£40m
of the ongoing share buyback programme still to be completed post
year-end.
Graham
Sutherland, FirstGroup Chief Executive Officer, said:
“Our focus
on operational delivery, driving demand for our services and
growing and diversifying our portfolio has resulted in further
progress in the second half of our financial year. This leaves us
well positioned to create further sustainable value for all our
stakeholders.”
First
Rail Teach-in for analysts and investors and notice of
results
The Group
will be hosting a First Rail Teach-in for analysts and investors
tomorrow, Wednesday 13 March from 09:30-12:30 in London. The event will be hosted by
Graham Sutherland, Chief Executive
Officer, Ryan Mangold, Chief
Financial Officer and the First Rail leadership team. To register
to join in person or to request the webcast details, please
email
corporate.comms@firstgroup.co.uk.
No
material new information will be provided at the event. Following
the event, a copy of the presentation and recording of the webcast
will be made available on the Group’s website at:
www.firstgroupplc.com/investors/reports-and-presentations.aspx.
The Group
expects to report its results for the year ended 30 March 2024 on 11 June
2024.
Contacts
at FirstGroup:
Marianna
Bowes, Head of Investor Relations
Stuart
Butchers, Head of Corporate Communications
corporate.comms@firstgroup.co.uk
Tel: +44
(0) 20 7725 3354
|
Contacts
at Brunswick Group:
Andrew
Porter / Simone Selzer
Tel: +44
(0) 20 7404 5959
|
|
|
Contacts
at Liberum Capital Limited:
Nicholas
How / John Fishley
Tel: +44
(0) 20 3100 2000
|
Contacts
at RBC Europe Limited:
James Agnew
/ Jamil Miah
Tel: +44
(0) 20 7653 4000
|
Notes
to Editors
FirstGroup
plc compiled analyst consensus estimates
A
consensus of publicly available sell-side analyst forecasts
compiled by the Group is available on the Group’s website at
www.firstgroupplc.com/investors/analyst-consensus.aspx.
Definitions
Adjusted operating profit is defined as operating profit from
continuing operations excluding items
which management has determined as not being relevant to an
understanding of the Group’s underlying business
performance.
Group Adjusted earnings are reported before net adjusting items and
excludes IFRS 16 impacts in First Rail management fee
operations.
Adjusted
net cash/(debt) excludes ring-fenced cash and IFRS 16 lease
liabilities from net cash/(debt).
Forward-looking
statements
Certain
statements included or incorporated by reference within this
announcement may constitute 'forward-looking statements' with
respect to the business, strategy and plans of the Group and our
current goals, assumptions and expectations relating to our future
financial condition, performance and results. By their nature,
forward-looking statements involve known and unknown risks,
assumptions, uncertainties and other factors that cause actual
results, performance or achievements of the Group to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. No
statement in this announcement should be construed as a profit
forecast for any period. Shareholders are cautioned not to place
undue reliance on the forward-looking statements. Except as
required by the UK Listing Rules and applicable law, the Group does
not undertake any obligation to update or change any
forward-looking statements to reflect events occurring after the
date of this announcement.
Legal
Entity Identifier (LEI): 549300DEJZCPWA4HKM93. Classification as
per DTR 6 Annex 1R: 3.1
About
FirstGroup
FirstGroup
plc (LSE: FGP.L) is a leading private sector provider of public
transport services. With £4.8 billion in revenue and around 30,000
employees, we transported more than 1.8m passengers a day in 2022/23. 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. Each of our divisions is
a leader in its field: First Bus is the second largest regional bus
operator in the UK, serving two-thirds of the country’s 15 largest
conurbations with a fleet of more than 4,500 buses, and carrying
more than a million passengers a day. 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 more than 3,500 locomotives and rail carriages
through three management fee-based train operating companies
(Avanti West Coast, GWR, SWR) and two open access routes (Hull
Trains and Lumo). We are formally committed to operating a
zero-emission First Bus fleet by 2035, and First Rail will help
support the UK Government’s goal to remove all diesel-only trains
from service by 2040. In February
2023 FirstGroup was named as one of the world’s cleanest 200
public companies for the fourth consecutive year by sustainable
business media group Corporate Knights in partnership with US
not-for-profit organisation, As You Sow. We provide easy and
convenient mobility, improving quality of life by connecting people
and communities. Visit our website at www.firstgroupplc.com and
follow us @firstgroupplc on X.