23rd Mar 2020 11:08
(Alliance News) - FirstGroup PLC said Monday that it can no longer provide guidance for the remainder of its financial year to the end of March, as the Covid-19 outbreak causes significant changes to the group's trading period.
In recent days, the FTSE 250 public transport operator said there were substantial volume reductions in its passenger demand businesses in North America and the UK.
The First Student division, which provides yellow school buses in the US and partly in Canada, noted that almost all of the schools served have announced closures, that are likely to be maintained until the end of the Easter holidays, and maybe even up to the end of the summer holidays.
Some of First Student's 1,100 contracts include guaranteed minimum revenue commitments, but the majority do not. As a result, the unit is in discussions with all customers to agree a level of payment to ensure that it can restart services when schools reopen.
First Transit, which provides fixed route, paratransit and shuttle management services, reported reduced service requirements from all operations, due to a fall in ridership and trip numbers.
Like First Student, First Transit has opened discussions with customers concerning payment through any reductions in service to allow operations to restart at an appropriate time.
Meanwhile in the UK, First Bus reported a 65% decline in both fare-paying passenger revenue and concessionary volumes, while First Rail posted a substantial drop in passenger volume, leading to revenue being 90% lower over the last few days.
Despite tough conditions, FirstGroup said it has significant current liquidity, with GBP400 million in cash and committed undrawn facilities as at the end of February, as well as access to additional financing sources, including a GBP250 million bank bridge facility signed on Thursday last week.
"We have taken immediate and significant actions to preserve cash and protect our financial position. Our customers recognise this is an unprecedented situation, and we have led constructive and positive engagement with them, including with school boards throughout North America and across all levels of government in the UK and North America. Currently, the situation is changing day by day, and accordingly we are fully utilising all levers at our disposal to ensure the most effective management of our cost base through this intense period of uncertainty," said Chief Executive Matthew Gregory.
Shares in FirstGroup were up 5.6% at 40.36 pence on Monday in London.
By Dayo Laniyan; [email protected]
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