REG-FirstGroup PLC: Further bus industry funding and liquidity update

FirstgroupAnnouncement

28/05/2020 07:05

FIRSTGROUP STATEMENT RE: FURTHER GOVERNMENT FUNDING
FOR ENGLAND’S BUS INDUSTRY AND LIQUIDITY UPDATE

Bus funding programme

FirstGroup plc (‘FirstGroup’ or ‘the Group’) welcomes the finalisation
of a further funding programme from the Department for Transport (‘DfT’)
to support the provision of additional vital services by regional bus
operators in England during the ongoing coronavirus pandemic. The new COVID-19
Bus Service Support Grant Restart programme builds on the support arrangements
previously announced on 3 April and which were due to expire in June.

Regional bus operators in England have initially been allocated £254m in
additional funding by DfT under the programme which will allow us to increase
bus service capacity in support of our communities as Government guidance on
travel restrictions begins to ease. The funding amount will be kept under
review to ensure that increased services can be sustained while ensuring there
is enough space for passengers to observe social distancing guidelines.

The programme, which runs for an initial twelve week period backdated to 12
May, is designed to support the industry while social distancing guidelines
require buses to run substantially below their potential capacity. Bus
operators will be able to claim funding support for the difference between
their revenue from passenger and other non-tendered contractual sources and
the costs of operating the services. Recoverable costs under the programme
include all reasonable operational costs as well as depreciation, pension
funding and debt finance costs reasonably allocated to English local bus
services. Operators will be responsible for agreeing with local authorities
the level of service to provide in each area to meet local demand for bus
services as the lockdown restrictions ease.  

The programme builds on previous commitments from the DfT, Scottish and Welsh
Governments to continue to (either themselves or by directing local
authorities to) fund the Bus Service Operators Grant, concessionary fares and
contracts for tendered services at levels prior to the pandemic. Discussions
are taking place with both the Scottish and Welsh governments to secure the
additional funding necessary to support increases in bus service capacity
through the recovery period.

First Bus continues to lead the industry with the introduction of a number of
measures to support adherence to government guidelines, offering safe,
socially distanced space across its bus fleet. Building on the passenger
counting functionality announced last week, First Bus is introducing
enhancements to the live tracking feature on its app by allowing customers to
check in real time how full each bus is, helping them to make more informed
travel decisions. We continue to encourage cashless payments, and use of the
app to purchase mTickets, to reduce the need for contact between passengers
and drivers. First Bus has also deployed seat signage to help ensure
passengers are appropriately distanced from each other and has established
enhanced cleaning protocols to help keep our passengers and employees safe.
Further enhancements will be made to First Bus’s cleaning regimes during
June, including the use of a virucide designed to provide protection for up to
30 days.

Commenting on the new funding programme, Matthew Gregory, FirstGroup Chief
Executive, said:

“This new funding will enable us to provide additional bus services that
will deliver a progressive increase in capacity across our networks, while
maintaining the necessary distancing in line with government and public health
authority guidance.

“Our bus services perform a unique and essential role in sustaining local
economies and communities, and in delivering real improvements to air quality
and congestion. As restrictions are gradually eased we will be ready to
respond quickly to resume services that will reconnect people and re-open
communities.

“We are introducing a number of industry-leading measures to help ensure
that government guidelines are observed across our fleet and that we offer
clean, safe, socially distanced space for passengers and our employees. These
measures range from innovative capacity tracking technology to seat signage
ensuring  that appropriate distancing is followed.

“I want to express my gratitude and thanks to all our employees who are
working so hard to keep vital bus services running at this difficult time.”

Update on liquidity position

As at 26 May 2020, the Group’s undrawn committed headroom and free cash was
stable at £770m. For the first month of the current financial year, cash
generated by operations in our Road divisions and for the Group as a whole was
positive and ahead of our projections at the outset of the month.

On 4 May S&P Global Ratings affirmed its long-term issuer credit rating on the
Group at BBB- whilst revising the outlook to negative from stable, in line
with Fitch Ratings’ position.

Corporate reporting

The Group has followed UK regulatory advice to review our full year reporting
timetable in light of the widely publicised challenges facing companies in
completing audits at the present time. The Group intends to publish its full
year results on 8 July.

Contacts at FirstGroup:
Faisal Tabbah, Head of Investor Relations
Stuart Butchers, Group Head of Communications
Tel: 020 7725 3354
corporate.comms@firstgroup.com

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. Notwithstanding the mitigations
and emergency measures already disclosed by the Group, the overall impact of
the coronavirus pandemic will have on the financial performance and prospects
of the Group in the near as well as the medium to longer term remains
extremely unclear. The situation is evolving very rapidly and while every
effort has been made to verify the accuracy of the information in this
announcement, the impact coronavirus is having on the performance of the Group
means such statements should be treated with extra caution. 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 £7.1 billion in revenue and around 100,000
employees, we transported 2.2 billion passengers last year. 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 1.6 million
passengers a day, and First Rail is one of the country's largest and most
experienced rail operators, carrying 345 million passengers last year.

Visit our website at www.firstgroupplc.com and follow us @firstgroupplc on
Twitter.

About First Bus

FirstGroup is one of the UK’s largest bus operators with around a fifth of
bus services outside London. A fleet of some 5,700 buses carries approximately
566m passengers annually, serving two thirds of the UK’s 15 largest
conurbations. We operate some US-style yellow school buses and have a fleet of
coaches available for charter. We also operate the Aircoach network in
Ireland.



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