REG-FirstGroup PLC: Statement re covenant amendment and liquidity update

FirstgroupAnnouncement

09/11/2020 07:05

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.



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