First Group PLC (FGP)

[idpickering]

Highlights here; viewtopic.php?f=15&t=16330

[idpickering]

Finals here; https://www.investegate.co.uk/firstgrou ... 0000PE20F/

[idpickering]

Half yearly here; https://www.investegate.co.uk/firstgrou ... 0000P42FA/

Also posted on HYP Practical for HYPer chat.

Here's a TMF item on this share, including the fact that the share is down over 20% as of now;

Overdone

FirstGroup today reported a first-half statutory pre-tax loss of £187m. However, it included a non-cash impairment charge of £124m on the carrying value of Greyhound, and a £59m insurance reserve charge, due to a deterioration in the US motor claims environment leading to increased insurance costs.

More positively, group revenue increased 6.9% (4.1% at constant currency), and “all divisions delivered growth after excluding disposals and withdrawals from loss-making routes.” Management added: “We are confident in delivering our trading expectations for the full year.”

The company also said it’s progressing through the detailed work to prepare for the separation and rationalisation of its businesses, and that the formal sale process for Greyhound “is now well advanced”.

I think today’s share-price crash is way overdone, and with the stock trading at little more than seven times this year’s forecast earnings, I reckon this represents a great opportunity to buy.

https://www.fool.co.uk/investing/2019/1 ... id-do-now/

Ian.

[idpickering]

Update on trading and portfolio rationalisation

Progress with portfolio rationalisation
•Board has commenced formal process to sell our North American contract businesses First Student and First Transit, with significant interest expressed by a range of potential buyers
•First Bus and First Rail to form the core of the ongoing Group, following the conclusion of the North American transaction processes

Recent trading summary
•Group revenue +7.5% YTD, or +6.0% in constant currency1
•Trading trends in First Student, First Transit and First Bus broadly similar to first half, with industry cost inflation and volatile passenger demand largely mitigated by management action and growth. Greyhound’s trading environment remains difficult, though this has been offset by a stronger First Rail financial performance following GWR’s successful introduction of new trains and a major timetable upgrade
•We have seen no significant impact from the coronavirus (COVID-19) outbreak to date, however we are monitoring the situation closely while planning for a range of scenarios including changes to current government guidance or policy
•Overall, based on the above the Group’s outlook for adjusted operating profit (pre-IFRS16) in constant currency for the year to 31 March 2020 is in line with our expectations, though we are mindful that the final month of the year is traditionally a significant trading period for the Group

https://www.investegate.co.uk/firstgrou ... 0000P1866/

[ursaminortaur]

FirstGroup have said that the impact on passenger numbers of Covid-19 mean that it could cease trading.


https://www.theguardian.com/business/2020/jul/08/firstgroup-could-cease-trading-as-coronavirus-hits-passenger-levels

FirstGroup, the UK’s largest bus company and operator of rail franchises including Avanti West Coast and Great Western Railway, has admitted it may not be able to continue trading because of the impact of the coronavirus on its business.

The company said on Wednesday there was “a material uncertainty” that may cast significant doubt on its continuing ability to operate, as it reported losses of just under £300m for the year to the end of March.

FirstGroup’s chief executive, Matthew Gregory, said: “Despite the near-term uncertainty, the long-term fundamentals of our businesses remain sound.”

However, FirstGroup shares closed down more than 20% on Wednesday. The company’s share price has declined by more than two-thirds since February.

[Breelander]

FirstGroup plc
Sale completion and increase in proposed return of value

Sale of First Student and First Transit to EQT Infrastructure completed yesterday evening

Proposed return of value in autumn increased to £500m (c.41p per share) from £365m

https://www.investegate.co.uk/firstgrou ... 0000P7DAA/

[Breelander]

Proposed Return of Value to be by means of a Tender offer.


AGM Trading Statement and Proposed Return of Value

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.

https://www.investegate.co.uk/firstgrou ... 0000P76D8/

[idpickering]

Proposed Tender Offer

•Proposed tender offer to return up to £500 million to shareholders at 105 pence per share
•Premium of 9.2 per cent. to the closing price on 26 October
•Tender Offer subject to shareholder approval; circular to be published today
•Irrevocable undertaking from Coast Capital Management to support the resolutions and tender its full holdings
•Tender proceeds expected to be despatched to Shareholders in December

FirstGroup plc (“FirstGroup” or the “Company”) announces the proposed return of up to £500 million to its shareholders (the “Shareholders”) by way of a tender offer at 105 pence per share (the “Tender Offer”, which is summarised below).

On 22 July 2021, FirstGroup completed the disposal of its First Student and First Transit businesses to EQT Infrastructure (the “Transaction”) for net disposal proceeds of $3,123 million (the “Net Disposal Proceeds”). On the same date, FirstGroup announced its intention to increase the proposed return of value to £500 million from £365 million previously (the “Return of Value”).

Following consultation with Shareholders, the Board has decided that the appropriate first step is to conduct the Return of Value by way of the Tender Offer. Shareholders are therefore being invited to tender some or all of their Ordinary Shares for purchase on the terms and subject to the Conditions set out in the Circular to be published today.

https://www.investegate.co.uk/firstgrou ... 0000PA783/

[Breelander]

FIRSTGROUP PLC
HALF-YEARLY REPORT FOR THE 26 WEEKS TO 25 SEPTEMBER 2021

• A transformed business having exited North American operations, with further value to be realised including from First Transit earnout and Greyhound property disposals and other receipts, in addition to the £500m recently returned to shareholders
• Resilient financial performance in period; no change to management's FY22 expectations, recognising there is uncertainty around the pace of recovery in light of the evolving circumstances of the pandemic
• First Bus on track to deliver 10% margin in first full year after pandemic-related restrictions end, with c.£20m in annualised cost efficiencies delivered since 2019
• First Rail's four management fee-based operations are delivering performance metrics in line with management expectations
  
• Passenger volume recovery ongoing, and renewed government commitment to strengthening convenient, low-carbon public transport connections is becoming a reality
• Cash generative businesses support intention to commence regular dividends within next 12 months and strong balance sheet provides flexibility to capture the opportunities ahead

https://www.investegate.co.uk/firstgrou ... 0000PCD27/

[Breelander]

Statement re. unsolicited approach

The Board of FirstGroup plc (" FirstGroup " or the "Company") notes the recent share price movement. The Company has received a series of unsolicited, conditional proposals from I Squared Capital Advisors (UK) LLP ("I Squared") in relation to a possible offer to acquire the entire issued, and to be issued, share capital of the Company.

https://www.investegate.co.uk/firstgrou ... 59599129M/

[Breelander]

Final Results

Some encouraging figures, including this....

Solid foundations in place for sustainable, long term value creation: strong financial position and outlook underpins a balanced capital allocation policy including the start of annual dividends:

While some uncertainty remains around the pace of recovery in light of the pandemic and broader economic backdrop, current trading is in line with our expectations, with the Group expected to make significant further progress in FY 2023
First Bus investment to meet zero emission fleet commitments well covered by divisional cash generation and government co-funding to facilitate the decarbonisation agenda
Actively developing further organic and inorganic opportunities for value creation in the UK and elsewhere
Progressive annual dividends to begin with final dividend of 1.1p per share proposed
Potential for further additional distributions to shareholders over time

https://www.investegate.co.uk/firstgrou ... 0000P3188/

It's only been nine years since FGP last paid a dividend.

In other news....

FirstGroup plc (‘FirstGroup’ or ‘the Group’) is pleased to announce the agreement of a National Rail Contract (‘NRC’) with the Department for Transport (‘DfT’) for its Great Western Railway (‘GWR’) train operating company. The new NRC will commence on 26 June 2022, when GWR’s current contractual agreement ends.

https://www.investegate.co.uk/firstgrou ... 0129P4A99/

[idpickering]

Statement re Greyhound property sale.

FirstGroup to sell almost all of its remaining legacy Greyhound property portfolio to Twenty Lake Holdings for c.$140m net proceeds
Following the sale, the Group's exit from residual Greyhound assets and liabilities will be substantially complete at an aggregate net value in excess of $160m since the start of the current financial year, ahead of expectations
Completion of the portfolio sale and receipt of proceeds expected in December 2022
FirstGroup plc ('FirstGroup' or the 'Group') today announces the sale by its subsidiary FirstGroup Services, Inc. of all but two of its remaining Greyhound US properties to Twenty Lake Management LLC, an affiliate of Twenty Lake Holdings LLC (the 'Buyer'), for net proceeds of c.$140m. The portfolio sale is subject to customary closing conditions for a transaction of this nature, with closing expected to occur and the proceeds received in cash in December 2022. In addition to the portfolio sale, the Group also completed the sale of a site in Denver for net $9m in August 2022, with some of the proceeds being applied in further de-risking of the residual Greyhound pensions liabilities.

In aggregate the book value of the Greyhound properties sold since the year end was c.$60m as at 26 March 2022, and as a result a profit on sale of c.$90m (net of property tax, selling and other costs) is expected to be booked in the current financial year.

Following these property sales, FirstGroup's residual exposure to legacy Greyhound assets comprises deferred consideration, residual real estate in Canada and two sites in the US (both under contract subject to due diligence), and funding awards from the Coronavirus Aid, Relief, and Economic Security ('CARES') Act and American Rescue Plan ('ARP') schemes relating to the period Greyhound was under the Group's ownership, altogether valued at c.$57m in total. This value is partially offset by legacy Greyhound liabilities (comprising residual insurance and pension liabilities which FirstGroup expects to de-risk in due course) and other provisions, together valued at c.$35m.

The Group will update on the application of the proceeds of the Greyhound property sale alongside publication of its half-yearly results in November.

https://www.investegate.co.uk/firstgrou ... 0000P9DC7/

Ian

[idpickering]

HALF-YEARLY REPORT FOR THE 26 WEEKS TO 24 SEPTEMBER 2022.

Resilient financial performance delivered despite the challenging political, economic and industrial relations environment FirstGroup is experiencing, in commin with many UK businesses
Group's adjusted attributable profit was in line with management expectations in the period, and expectations for the current financial year are broadly unchanged despite a shift in mix
Financial performance in First Rail was led by strong growth in open access operations; working hard to deliver passenger service level objectives across the four management fee-based contracts
Continuing to strengthen First Bus for when current funding arrangements end, while managing industry-wide driver shortages and cost inflation in the near term
Progress made monetising contingent values from exiting North America, with £122m sale of legacy Greyhound properties anticipated to complete in December and First Transit earnout recently triggered at c.£74m
Strategy focused on continuous improvement in operational delivery, targeted investment in adjacent growth opportunities and playing a leading role in the decarbonisation of public transport

https://www.investegate.co.uk/firstgrou ... 0000PB4C8/

Ian.

[idpickering]

South Western Railway Contract Extension.

FirstGroup plc ('FirstGroup' or ‘the Group') today announces that the Department for Transport (‘DfT’) have exercised their option to continue the current contractual arrangements for the Group’s South Western Railway (‘SWR’) train operating company for the full two year extension period, as set out in SWR’s National Rail Contract (‘NRC’). The current NRC, which began in May 2021, will now run until 25 May 2025 on the existing terms.

Commenting, Graham Sutherland, FirstGroup Chief Executive Officer said:

“We welcome the contract extension for South Western Railway, which enables us to build on the achievements of the first two years of the contract and continue improving the customer offering. We are committed to working closely with government and our partners to deliver a successful railway network that provides vital connections for customers and communities along the SWR route.”

https://www.investegate.co.uk/firstgrou ... 0100P86D7/

Ian (No holding).

[idpickering]

Trading update.

FirstGroup plc ('FirstGroup' or ‘the Group') today reports an update on trading since the half-year results for the 26 weeks to 24 September 2022, published in November 2022.

First Bus improved performance driven by higher passenger volumes in H2 2023 and driver resource pressures easing in certain locations
First Rail open access operations benefiting from stronger than anticipated passenger demand over the winter months
Acquisition of Ensign Bus Company Limited (‘Ensignbus’) completed
Sale of First Transit by EQT Infrastructure completed with final earnout consideration anticipated later in 2023

https://www.investegate.co.uk/firstgrou ... 0100P18E2/

Ian (No holding).

[idpickering]

West Coast Partnership Contract Extension.

FirstGroup plc (‘the Group’) today announces that it has agreed with the Department for Transport (‘DfT’) to extend the current arrangements for the West Coast Partnership (‘WCP’) rail contract.

The current arrangements for WCP were due to expire on 31 March 2023 and are now extended to 15 October 2023 under broadly the same terms and conditions. The WCP rail contract comprises the operation of Avanti West Coast (‘Avanti’) and acting as shadow operator to the HS2 programme. Discussions are ongoing with DfT regarding the longer-term National Rail Contract for WCP.

The Group also announces that Andy Mellors has been appointed Managing Director of Avanti with immediate effect. Andy previously held senior roles at Great Western Railway, South Western Railway and most recently as Managing Director of the Group’s non-franchised rail businesses. Andy takes over from Steve Montgomery, First Rail Managing Director who has been acting Managing Director of Avanti since September 2022.

https://www.investegate.co.uk/firstgrou ... 0100PFA12/

Ian.

[idpickering]

FirstGroup plc Results for the 52 weeks to 25 March 2023.

https://www.investegate.co.uk/announcement/7565276

Ian.

[idpickering]

Buyback Programme.

https://www.investegate.co.uk/announcem ... me/7598205

Ian (No holding).

[idpickering]

Post close trading update.

First Rail

Demand for the division’s open access operations (Lumo and Hull Trains) has been stronger than anticipated due to increased leisure travel during the summer period. In addition, the final variable fee payments due for the division’s management fee-based contracts for the FY 2023 fiscal year have now been agreed with the Department for Transport (‘DfT’) at a rate ahead of the amounts accrued in the Group’s FY 2023 financial statements. As a result of these factors, the division’s FY 2024 adjusted operating profit is expected to be £12-15m ahead of expectations.

First Bus

Despite ongoing inflationary pressures, the division has traded slightly ahead of expectations during the first six months of FY 2024, due to strong passenger volumes and productivity improvements resulting from the management actions we have taken to transform the business.

In September 2023, First Bus concluded a period of consultation with regards to its two Local Government Pension Funds and will subsequently terminate its participation in these funds on 31 October 2023, with affected employees enrolled into the First Bus Retirement Savings Plan. As a result of the termination, the Group anticipates a c.£2-3m annualised cost saving for the First Bus division, with an estimated saving of c.£1m in FY 2024. The settlement of the pension obligations, to be determined on the termination date, is expected to result in an estimated Group net cash inflow of up to £15m after costs.

https://www.investegate.co.uk/announcem ... te/7808974

Ian.