FirstGroup plc
Statement re: Covenant amendment and liquidity update
As previously indicated in the trading update of 15 September 2020, FirstGroup plc (‘FirstGroup’
or the ‘Group’) expects to report a small adjusted operating profit
for the seasonally weaker first half of the current financial year.
This result would be ahead of the base case scenario outlined in
the full year results announcement earlier this summer. As also
previously stated the 30 September
2020 covenant tests are expected to be comfortably met when
the accounts for the period are finalised. However, whilst the
Board is confident that the balance sheet is now robust in a range
of downside scenarios, as a matter of prudence the Group determined
that it is an appropriate point to secure enhanced financial
flexibility from its lenders for the next two covenant testing
dates, covering the typical period of twelve months.
The Group has therefore agreed covenant amendments for the
31 March 2021 and 30 September 2021 tests with its lending banks
and USPP investors on similar terms. The net debt:EBITDA covenant
has been amended to less than 5.5 times and then 4.5 times for the
March and September tests respectively (compared to 3.75 times
normally). At both testing dates the fixed charge covenant has also
been amended to greater than 1.0 times (compared to 1.4 times
normally). The Group has agreed that net debt including rail
ring-fenced cash will not exceed £2.0bn and minimum liquidity
levels of £150m will be maintained during this period.
The Group’s free cash (before rail ring-fenced cash) and undrawn
committed revolving banking facilities has remained broadly stable
at c.£810m as at 6 November 2020. The
Group has ‘investment grade’ long-term issuer credit ratings from
both Fitch Ratings and S&P Global Ratings.
The Group will continue to take all prudent and appropriate
action to ensure that it emerges from the pandemic in the most
robust position possible in order to best serve our communities and
deliver on our strategic plans.
Contacts at FirstGroup:
Faisal Tabbah, Head of Investor
Relations
Stuart Butchers, Group Head of Communications
corporate.comms@firstgroup.com
Tel: +44 (0) 20 7725 3354
Contacts at Brunswick PR:
Andrew Porter / Simone Selzer, Tel: +44 (0) 20 7404 5959
Legal Entity Identifier (LEI): 549300DEJZCPWA4HKM93.
Classification as per DTR 6 Annex 1R: 3.1.
Figures presented in this announcement are not audited. 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.
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.
About FirstGroup
FirstGroup plc (LSE: FGP.L) is a leading provider of transport
services in the UK and North
America. With £7.8 billion in revenue in 2020 and around
100,000 employees, we transported 2.1 billion passengers. Whether
for business, education, health, social or recreation – we get our
customers where they want to be, when they want to be there. We
create solutions that reduce complexity, making travel smoother and
life easier. We provide easy and convenient mobility, improving
quality of life by connecting people and communities. Each of our
five divisions is a leader in its field: In North America, First
Student is the largest provider of home-to-school student
transportation with a fleet of 43,000 yellow school buses, First
Transit is one of the largest providers of outsourced transit
management and contracting services, while Greyhound is the only
nationwide operator of scheduled intercity coaches. In the UK,
First Bus is one of Britain's
largest bus companies with 1.4 million passengers a day in 2020,
and First Rail is one of the country's most experienced rail
operators, carrying 340 million passengers in the year. Visit our
website at www.firstgroupplc.com and follow us @firstgroupplc on
Twitter.