FIRSTGROUP PLC
COMPLETION OF
GREYHOUND PROPERTY SALE AND
UPDATE ON CAPITAL ALLOCATION
- Greyhound property portfolio sale completes with net proceeds
of £122m
- Following the receipt of these proceeds, and as part of the
Group’s balanced capital allocation policy, the Group
announces:
- £75m on-market share buyback programme to commence on
19 December 2022
- £15.7m of the Group’s 2024 6.875% bonds repurchased in recent
Bank of England bond auction
- FirstGroup retains a strong balance sheet – pro-forma adjusted
cash position expected to be in the range of £30-40m at the end of FY2023 assuming the buyback
programme is fully executed.
FirstGroup plc ('FirstGroup' or the
'Group') has completed the sale of all but two of its remaining
Greyhound US properties to an affiliate of Twenty Lake Holdings LLC
(‘Twenty Lake’) for the net proceeds of £122m, as announced on
20 September 2022. The Group’s legacy
Greyhound assets and liabilities are expected to generate c.£8m in
net cash in FY 2024 and beyond, with c.£140m realised in FY 2023
after foreign exchange hedging costs.
The Board has considered the use of
the Greyhound property proceeds as part of the Group’s balanced
capital allocation policy, including its commitments to decarbonise
the First Bus fleet, maintain its progressive dividend policy and
to review targeted investment in strategically and financially
accretive growth opportunities related to its UK regional bus
operations. Accordingly, following the receipt of the Greyhound
proceeds and in light of the Group’s cash generative operations and
strong net cash financial position, the Group is launching a share
buyback programme (the ‘Programme’) to purchase up
to £75m of ordinary shares of 5p, in line with the
Group’s existing authority granted by shareholders, which will
commence on 19 December.
In November
2022 the Group bought back £15.7m of the 2024 6.875% bonds
at 100.67% as part of a Bank of England bond auction. As a result, £184.3m of
the 2024 6.875% bonds remain outstanding and the Group’s debt
financing costs will decrease by c.£1m per annum from December 2022 onwards.
Graham Sutherland, FirstGroup Chief Executive
Officer, said:
“FirstGroup is in a strong financial
position, with a balanced capital allocation policy and a clear
strategy. We are well-placed to play a key role in the
decarbonisation of public transport, make targeted investments in
adjacent UK growth opportunities and to deliver value to our
shareholders, including through the share buyback programme we have
announced today.”
Details of the
share buyback Programme
The Programme will commence on
19 December 2022 and end no later
than 18 December 2023, subject to
market conditions. The sole purpose of the Programme is to reduce
the issued share capital of the Group and therefore the repurchased
shares will initially be held in Treasury, before being cancelled
at a later date. Treasury shares are not entitled to dividends and
have no voting rights at general meetings.
The Programme will be executed under
the authority granted by shareholders at the FirstGroup annual
general meeting on 27 July 2022 to
acquire up to 75,013,764 shares, equating to c.10% of the issued
share capital at the time.
The Group is entering into a
non-discretionary arrangement with Liberum Capital Limited and RBC
Europe Limited which will enable the purchase of ordinary shares
for the Programme to continue through close periods.
Any purchase of Ordinary Shares
pursuant to the Programme will be announced no later than
7:30 a.m. on the business day
following the calendar day on which the purchase occurs.
The Programme will be conducted
within certain pre-set parameters including those prescribed by the
Market Abuse Regulation 596/2014 (as it forms part of domestic law
by virtue of section 3 of the European Union (Withdrawal) Act 2018
(as amended)) and Chapter 12 of the Listing Rules.
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 PR:
Andrew Porter / Simone Selzer
Tel: +44 (0) 20 7404 5959 |
Contacts at Liberum
Capital Limited:
Nicholas How / John Fishley / William Hall
Tel: +44 (0) 20 3100 2000 |
Contacts at RBC Europe
Limited:
James Agnew / Jonathan Hardy / Jack Wood
Tel: +44 (0) 20 7653 4000 |
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.
Notes
Legal Entity Identifier (LEI):
549300DEJZCPWA4HKM93. Classification as per DTR 6 Annex 1R: 2.2 and
2.4
This announcement contains inside
information. The person responsible for making this announcement is
David Blizzard, Company
Secretary.
FirstGroup plc (LSE: FGP.L) is a
leading private sector provider of public transport services. With
£4.6 billion in revenue and more than 30,000 employees, our UK
divisions transported nearly 1.5m
passengers a day in the last financial year. 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.4,900 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.3,800 rail vehicles through
four management fee-based train operating companies (Avanti West
Coast, GWR, SWR, TPE) and two open access routes (Hull Trains and
Lumo). 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. In 2022 FirstGroup was
named as one of the world's cleanest 200 public companies for the
third consecutive year by sustainable business media group
Corporate Knights in partnership with US not-for-profit
organisation, As You Sow. Visit our website at
www.firstgroupplc.com and follow us @firstgroupplc on Twitter.