REG-FirstGroup PLC: Completion of Property Sale & Capital Allocation Update

FirstgroupAnnouncement

16/12/2022 11:45

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.



Copyright (c) 2022 PR Newswire Association,LLC. All Rights Reserved