REG-FirstGroup PLC: Agreement To Acquire Ensign Bus Company

FirstgroupAnnouncement

08/02/2023 07:15

FIRSTGROUP PLC

Agreement to Acquire Ensign bus company
* Agreement to purchase Ensign Bus Company Limited (‘Ensignbus’)
* Ensignbus is a high-performing business with strong positions in
business-to-business (‘B2B’) and regional commercial bus operations in
Essex, with a vehicle refurbishment and re-sale operation, and a high value
depot
* Completion of the acquisition is anticipated in the next few months subject
to customary regulatory review
FirstGroup plc (‘FirstGroup’ or the ‘Group’) today announces that it
has signed an agreement to purchase Ensign Bus Company Limited. The
acquisition of the Ensignbus business will not only provide a number of
synergies and value accretive growth opportunities in the B2B and bus vehicle
dealership markets, but it will also enhance the Group’s local commercial
bus operations in Essex.

Ensignbus’ commercial bus operations comprise two B2B segments that include
rail replacement and private hire contract operations and a local bus route
network complementary to First Bus’s operations in Essex. The business has a
young vehicle fleet of 55 buses that will require limited capital expenditure
for several years. The Ensignbus specialist heritage fleet is excluded from
the transaction.

In addition to its commercial operations, Ensignbus has a vehicle
refurbishment and re-sale business that purchases used vehicles and
refurbishes to modern standards before re-selling. This will benefit First Bus
and the wider UK bus industry as the oldest, most polluting diesel buses are
taken out of service. It is anticipated that the market for the resale of
lower emission used diesel vehicles will continue to remain robust in the
medium term, followed by the emergence of a similar market for the resale of
zero emission vehicles.

If the acquisition completes before the Group’s FY 2023 year end, the Group
anticipates a year end adjusted net cash position (pre IFRS16 and excluding
ring fenced cash) of £70-80m, reflecting the ongoing buyback programme and
the timing of net capital expenditure and working capital flows.

Graham Sutherland, FirstGroup Chief Executive Officer, said:

“The acquisition of Ensignbus, a long-established, high-performing business,
will allow us not only to grow our B2B offering but to also enhance our
operational footprint in Essex, and we look forward to welcoming Ensignbus
employees to the Group. This is a strategically and financially accretive
growth opportunity for us, and one that is fully aligned to our balanced
capital allocation policy.”

Peter Newman, Ensignbus Chairman, said:

“I want to thank all of our employees at Ensignbus for their ongoing hard
work to deliver great service for our passengers across all of our communities
in Essex, and we will be supporting them fully as they move to their new
employer. We’re pleased that First Bus, with their reputation for customer
service, innovation and sustainability, will take the Ensignbus business
forward as a going concern and we wish them a successful future. We will
continue to serve our communities and operate our network as usual until the
completion date.”

 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: 3.1

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 not
purchase any new 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.



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