2nd Nov 2026 10:49
(Alliance News) - FirstGroup PLC on Monday said it has sold GBP109 million worth of assets to the West Yorkshire Combined Authority and won two contracts as the region transitions to a franchising model.
The Aberdeen, Scotland-based public transport provider said the agreement covers five freehold depots, and fixed assets within the depots, plus a bus fleet, including 251 diesel vehicles and 79 electric vehicles.
The depot sales have completed, and the fleet sales will occur as the three WYCA franchise tranches go live, currently planned for May 2027, January and October 2028, the firm explained.
First Bus will continue to run existing commercial bus routes up to the date of the franchise commencement at the respective depots, with the depots being leased to the group at a peppercorn rental rate.
FirstGroup anticipates a post-tax disposal gain of around GBP30 million in relation to the depot sales that will be treated as an adjusting item for the purposes of financial year 2027 adjusted operating profit and adjusted earnings per share, and cash inflows of GBP55 million for FY27.
The balance of the cash flows relating to the fleet sales will result in further positive adjusting items in financial 2028 and 2029, with the final number of fleet sales and sale proceeds depending on the extent that the group is awarded contracts under the second and third tranches.
Following the transition of the five depots to franchising around 130 buses will be "cascaded" to other parts of the group resulting in the deferral of some capital expenditure and working capital, representing a further around GBP10 million cash flow benefit over the next two years.
FirstGroup said it has been awarded two bus franchise contracts in Bramley and Huddersfield, where it currently operates, as part of the first of three tranches of WYCA's franchise programme.
The contracts are due to commence next May, and run for five years with an option to extend for a further two years. FirstGroup anticipates combined annual revenues of GBP40 million from the contracts.
Chief Executive Graham Sutherland said: "We are delighted to have reached an agreement with regards to the sale of our assets and secured these important franchise contracts. We look forward to drawing on our scale, expertise and strong operational track record to deliver high-quality, sustainable bus services in partnership with the West Yorkshire Combined Authority."
Shares in FirstGroup rose 4.3% to 226.20 pence each in London on Monday, one of the best performing stocks in the FTSE 250 index, which was up 0.5%.
By Jeremy Cutler, Alliance News reporter
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