13th Sep 2021 12:14
(Alliance News) - FirstGroup PLC maintained its full-year outlook on Monday as trading continued in line with its expectations as the company also proposed a tender offer to return some cash from recent disposals to shareholders.
Shares in FirstGroup were trading 2.7% higher at 88.85 pence each in London on Monday afternoon, one of the best mid-cap performers.
The FTSE 250-listed company, which pledged shareholder returns after selling its First Student and First Transit units, said it will return the funds through a tender offer.
FirstGroup increased its planned payout to investors to GBP500 million from GBP365 million in July, after receiving more than expected from the sale of the two US units.
Full details of the offer, including tender price and key dates will be sent to shareholders in due course, the company said.
The Aberdeen, Scotland-based transport operator company maintained its prior full-year guidance, noting that trading has continued in-line with company expectations since the end of its previous financial year on March 27.
FirstGroup said its bus passenger volumes averaged 65% of pre-virus levels in recent weeks, but expected this figure to rise as schools and universities resume teaching in September.
The company's full-year results, released in late July, noted that First Bus unit's contribution to adjusted operating profit in financial 2022 will depend on the pace at which passenger volumes recover.
In July, FirstGroup said it expected to "build momentum" in financial 2022 to deliver its major financial objectives, including the resumption of regular dividend payments.
Meanwhile, the company noted that its services in England will be supported by the Department of Transport's GBP226.5 million bus recovery funding package until April 2022.
This follows the end of the UK government's Covid-19 Bus Service Support Grant on September 1.
In the US and Canada, the company's non-core Greyhound operations have seen passenger mileage remained just over half of pre-pandemic levels in recent weeks. FirstGroup said this was supported by additional awards for the service under federal schemes, including the American Rescue Plan.
FirstGroup has previously noted its intention to pursue all exit options for its Greyhound business, which operates a fleet of 1,200 intercity coaches across the US and Canada.
Chair David Martin said the company is: "Trading is in line with our expectations year to date, and we continue to support our passengers and other stakeholders as travel patterns evolve... The vital role of public transport is clear and the policy backdrop has never been more supportive. With a well-capitalised balance sheet and an operating model that will support an attractive dividend for shareholders commencing in 2022, I am confident that FirstGroup is well-placed to deliver sustainable value creation as a focused UK public transport leader."
In addition, the company said it has signed a new GBP300 million revolving credit facility with a group of its relationship banks. This replaces all previous facilities which have been fully repaid and cancelled, the company added.
By Scarlett Butler; [email protected]
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