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FirstGroup expands liquidity to ?800m with Covid financing issue
24th Apr 2020 07:25
(Sharecast News) - FirstGroup said it had boosted liquidity to ?800m after accessing another ?300m under the UK government's Covid Corporate Financing Facility scheme.
The FTSE 250 passenger transport operator also said its US Greyhound operation was "uniquely positioned" to access a significant chunk of the $326m (?264.39m) in CARES Act funding, which has been allocated to US states in support of intercity bus services.
Further cost control measures had been put in place across the group, with executive directors and the board volunteering a 20% reduction in salaries and fees, with salary reductions and deferrals across the firm's wider senior management.
Triennial valuations had been agreed with the trustees of First Bus pension schemes, with lower overall deficit payments for the year to 31 March 2021.
The group said its full-year results reporting calendar would be extended in recognition of current challenges it was facing in producing its audited accounts.
The company said that as at 21 April, before the drawings made under the Covid Corporate Financing Facility (CCFF), its undrawn committed headroom and free cash had increased to around ?500m.
That comprised ?190m in free cash and ?310m of undrawn committed bank revolving credit facilities, and represented an improvement of around ?100m compared with the position at the end of February. Free cash was in addition to the ring-fenced cash inside its rail franchise operations.
Greyhound's revenues had fallen by around 80% since the start of the coronavirus outbreak, with the business operating just over a third of its pre-outbreak timetabled mileage at present.
As all North American schools are closed, First Student was currently operating no home-to-school buses, and "minimal" charter services. To date, the division had agreed terms to receive either full or partial payment from customers representing around 70% of its bus fleet.
A number of customers had reduced the amount of revenue reimbursement to reflect its ability to mitigate certain labour and fuel-related costs while no services were running.
First Transit's activity levels were on average operating at around 60% of its activity levels prior to the outbreak.
"Negotiations continue with many of our customers in First Student and First Transit in light of the federal emergency funding that is now becoming available to them and we anticipate that the revenue recovery levels will increase further as a result," the board said.
In the UK, First Bus was currently operating a level of service equivalent to about 40% of normal capacity, broadly in accordance with the industry-wide funding support agreement with the UK government announced on 3 April.
Passenger volumes were about 90% lower, but the agreement - coupled with other commitments around the continued payment of the Bus Service Operator's Grant, concessionary fares and contract tenders at pre-crisis levels - enabled the division to run mileage in excess of customer demand to support the needs of key workers.
All of the group's First Rail franchises were operating under the Emergency Measures Agreements announced on 23 March, under which the government had waived each operator's revenue, cost and contingent capital risk until at least 20 September, and during which time the operators were being paid a fixed management fee.
At 0810 BST, shares in FirstGroup were up 3.59% at 61.32p.
The FTSE 250 passenger transport operator also said its US Greyhound operation was "uniquely positioned" to access a significant chunk of the $326m (?264.39m) in CARES Act funding, which has been allocated to US states in support of intercity bus services.
Further cost control measures had been put in place across the group, with executive directors and the board volunteering a 20% reduction in salaries and fees, with salary reductions and deferrals across the firm's wider senior management.
Triennial valuations had been agreed with the trustees of First Bus pension schemes, with lower overall deficit payments for the year to 31 March 2021.
The group said its full-year results reporting calendar would be extended in recognition of current challenges it was facing in producing its audited accounts.
The company said that as at 21 April, before the drawings made under the Covid Corporate Financing Facility (CCFF), its undrawn committed headroom and free cash had increased to around ?500m.
That comprised ?190m in free cash and ?310m of undrawn committed bank revolving credit facilities, and represented an improvement of around ?100m compared with the position at the end of February. Free cash was in addition to the ring-fenced cash inside its rail franchise operations.
Greyhound's revenues had fallen by around 80% since the start of the coronavirus outbreak, with the business operating just over a third of its pre-outbreak timetabled mileage at present.
As all North American schools are closed, First Student was currently operating no home-to-school buses, and "minimal" charter services. To date, the division had agreed terms to receive either full or partial payment from customers representing around 70% of its bus fleet.
A number of customers had reduced the amount of revenue reimbursement to reflect its ability to mitigate certain labour and fuel-related costs while no services were running.
First Transit's activity levels were on average operating at around 60% of its activity levels prior to the outbreak.
"Negotiations continue with many of our customers in First Student and First Transit in light of the federal emergency funding that is now becoming available to them and we anticipate that the revenue recovery levels will increase further as a result," the board said.
In the UK, First Bus was currently operating a level of service equivalent to about 40% of normal capacity, broadly in accordance with the industry-wide funding support agreement with the UK government announced on 3 April.
Passenger volumes were about 90% lower, but the agreement - coupled with other commitments around the continued payment of the Bus Service Operator's Grant, concessionary fares and contract tenders at pre-crisis levels - enabled the division to run mileage in excess of customer demand to support the needs of key workers.
All of the group's First Rail franchises were operating under the Emergency Measures Agreements announced on 23 March, under which the government had waived each operator's revenue, cost and contingent capital risk until at least 20 September, and during which time the operators were being paid a fixed management fee.
At 0810 BST, shares in FirstGroup were up 3.59% at 61.32p.